Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

BARBADOS.

Mr. Speaker: I have to inform the House that I have received from Sir Harold Austin, Speaker of the House of Assembly of Barbados, a copy of the following Resolutions agreed to by that House:

Resolved, nemine contradicente, That Mr. Speaker be requested to inform the Speaker of the House of Commons of the passing of their Resolution of Greetings, and to ask him to communicate it to the Members of the House of Commons

HAROLD AUSTIN,

Speaker.

Monday, 26th June, 1939.

Resolved, nemine contradicente, That on this day set apart to commemorate the Ter-centenary of the House of Assembly of Barbados, the Speaker and Members with all due respect send their hearty greetings to the Speaker and Members of the House of Commons.

The House of Assembly of Barbados is the third oldest Elective Chamber in the British Empire, and in procedure, parliamentary privilege, and the maintenance of popular liberty the House of Commons has always been their model.

HAROLD AUSTIN,

Speaker.

Monday, 26th June, 1939.

PRIVATE BUSINESS.

COLNE VALLEY WATER BILL.

Lords Amendments considered.

The Chairman of Ways and Means (Sir Dennis Herbert): The bulk of these numerous Amendments consist of alterations made in order to give effect to an undertaking given in Committee of the House of Commons, to bring the Bill into conformity with the Water Undertakings Bill, which is now being considered by a Joint Committee of both Houses. Other Amendments deal with the correction of a new Clause inserted in the House of Commons under a misapprehension, and certain protective provisions and all the remainder are purely drafting Amendments.

Lords Amendments agreed to.

West Surrey Water Bill [Lords].

As amended, considered.

The Chairman of Ways and Means: There are three Amendments here to be made at the request of the promoters. They are all of a purely drafting nature.

Amendments agreed to.

Bill to be read the Third time.

Ministry of Health Provisional Order Confirmation (Bradford) Bill [Lords] (by Order).

Second Reading deferred till Tomorrow.

Oral Answers to Questions — INDIA.

FEDERATION.

Mr. Sorensen: asked the Under secretary of State for India whether he has any further statement to make respecting Indian Federation; and whether His Majesty's Government intend to suspend further plans in this respect for the time being?

The Under-Secretary of State for India (Lieut.-Colonel Muirhead): I have nothing to add to what I said in reply to my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) on 8th June.

Mr. Sorensen: Can the hon. and gallant Gentleman give any sort of indication when he will be able to take a more definite step in regard to this matter?

Lieut.-Colonel Muirhead: The hon. Member will recollect that in the reply to which I have referred it was indicated that from the end of January a period of six months would be given. It will not be possible to deal with the White Paper before then and the hon. Member will realise some little time will need to elapse after that.

CATTLE (ACCLIMATISATION).

Lieut.-Colonel Sir Thomas Moore: asked the Under-Secretary of State for India whether, in view of the urgency of raising milk-yield standards in India, he will take steps to encourage the experiments which are being made with regard to the possibility of acclimatising European pedigree cattle in the first place to a semi-tropical country such as Palestine and then sending the Palestine-born pedigree European animals to India?

Lieut.-Colonel Muirhead: I will invite the attention of the authorities in India to this suggestion. If my hon. and gallant Friend has any information that would assist its consideration I should be glad to receive it.

Mr. Robert Gibson: Is the hon. and gallant Member aware that the Ayrshire breed is very adaptable, and that there are already representatives of this breed in India?

Lieut.-Colonel Muirhead: I have heard that opinion expressed more than once before.

Sir T. Moore: Is not my hon. and gallant Friend aware that it is not necessary for any other hon. Member to make such representations? I am perfectly capable of doing that.

Oral Answers to Questions — LEAGUE OF NATIONS ASSEMBLY (UNITED KINGDOM DELEGATION).

Mr. Noel-Baker: asked the Prime Minister the names of His Majesty's Government's delegation to the next Assembly of the League of Nations?

The Prime Minister (Mr. Chamberlain): The United Kingdom Delegation to the next Assembly of the League of Nations will be as follows:

Delegates:

My Noble Friend the Secretary of State for Foreign Affairs.
My Right Honourable Friend the Secretary of State for the Colonies.
My Right Honourable Friend the Financial Secretary to the Treasury.

Substitute Delegates:

My Right Honourable Friend the Parliamentary Under-Secretary of State for Foreign Affairs.
My Honourable Friend the Assistant Postmaster-General.
My Honourable Friend the Member for Wallsend (Miss Ward)
One of the Legal Advisers to the Foreign Office.

Oral Answers to Questions — SPAIN.

Mr. Dobbie: asked the Prime Minister whether he can give any information to the House as to the numbers of the Inter national Brigade, and their respective nationality, who are still prisoners of war, held by the Burgos Government; whether any reference was made to others than those of French and British nationality in the talks between the representatives of these two countries and the Burgos Government; was any arrangement made for their release; and of what nature these arrangements were?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): There are four British subjects, and, according to


our information, approximately 90 Czech, German and Austrian nationals, ex-members of the International Brigade, still in prison in Spain. No reference was made to other than those of British nationality in any. conversations between His Majesty's Representatives in Spain and the Spanish Government, nor, so far as my Noble Friend is aware, have the French Government had any discussions about prisoners of non-French nationality. The last part of the question does not, therefore, arise.

Mr. George Griffiths: Does the Undersecretary know anything further about Major Frank Ryan, on whom a 30 years' sentence has been passed?

Mr. Butler: I wish we did know more about him. We have done out best to find out. The Eire Minister in Spain is dealing with the case of Major Frank Ryan.

Mr. Day: asked the Prime Minister the number of British subjects who are still under arrest in Spain as a result of the civil war; and what steps he is taking to secure their release?

Mr. Butler: Apart from the four ex-members of the International Brigade, there are, so far as His Majesty's Government are aware, five British subjects under arrest in Spain. His Majesty's Ambassador is investigating their cases.

Mr. Day: Will His Majesty's Ambassador also make representations that if these men are released they should also obtain their personal belongings, which were taken away from them?

Mr. Butler: We shall certainly do our best.

Oral Answers to Questions — FAR EAST (SITUATION).

Mr. Arthur Henderson: asked the Prime Minister whether he can make a statement on the present situation in the Far East; and whether the Japanese Government have replied to the representations of His Majesty's Government with regard to the detention of Colonel Spear?

Lieut.-Commander Fletcher: asked the Prime Minister whether the military attaché to His Majesty's Embassy in Tokyo will have legal representation at his forthcoming court-martial at the hands

of the Japanese authorities; and whether it is proposed to inform the Japanese Government that in view of the decision to court-martial a British officer enjoying diplomatic immunity and of the recurrence of stripping of British subjects at Tientsin the proposed negotiations at Tokyo must be suspended?

Mr. Sorensen: asked the Prime Minister whether he has any further information to give the House respecting alleged anti-British demonstrations in China; and whether these outbreaks are confined to areas under Japanese influence?

Mr. Noel-Baker: asked the Prime Minister whether he can make a statement concerning the present situation in the Treaty Ports in China, and concerning the recent action of Japanese armed forces in those ports?

The Prime Minister: As stated in the official communiqué issued in Tokyo, the Japanese Minister for Foreign Affairs and His Majesty's Ambassador in Tokyo met on 15th July at the former's official residence, and held a friendly discussion on the general questions forming the background of the situation which has arisen in Tientsin. The interview was adjourned to give time for further consideration of the issues raised.
The date for the official opening of the negotiations at Tokyo on the questions arising out of the situation at Tientsin has not yet been fixed. There have been many statements in the Press, both in Japan and this country, that the Japanese Government will require a fundamental reversal of the Far Eastern policy of His Majesty's Government as a condition of the opening of the negotiations. I should like to make it clear that this country would not, and could not, so act in regard to its foreign policy at the demand of another Power, nor has His Majesty's Government received any such demand from the Japanese Government. In the opinion of His Majesty's Ambassador at Tokyo, the Japanese official attitude would be more correctly described as a desire that Great Britain should endeavour to regard the Sino-Japanese hostilities with more understanding of Japan's difficulties and of the Japanese side of the case. His Majesty's Government share the Ambassador's view that to attribute to the Japanese Government


intentions which may be found to have no basis in fact, would only be calculated to prejudice the success of the forthcoming negotiations.
The local situation at Tientsin has, on the whole, improved. Food supplies are entering in sufficient quantities and adequate supplies of milk are now available. Anti-British demonstrations have taken place in various towns in North China, and some damage has been done to missionary property in the province of Shansi. The Japanese authorities in China have given official notification to the effect that vessels of third Powers will be admitted to the harbour at Swatow under certain conditions, and, so far as military operations permit, at the rate of approximately one per week. Negotiations are at present in progress between the British and Japanese authorities. Certain British subjects have been evacuated from Foochow.
His Majesty's Ambassador has been informed by the Japanese Government that they believe that Colonel Spear had been put on trial, but they were making further inquiries. In view of the obviously unsatisfactory nature of such procedure, Sir R. Craigie has made the strongest representations and has requested the Japanese Government to agree to the despatch of a Japanese-speaking British military officer to Kalgan.

Mr. A. Henderson: Does the reply of the Prime Minister mean that the forthcoming negotiations at Tokyo will be confined to 02-July17-1939_swapnathe local issues at Tientsin, and that His Majesty's Government will not agree to the discussion of any modification of the principles of the Nine-Power Treaty behind the backs of the Government of the United States and other Governments who are signatories to the Treaty?

The Prime Minister: Yes, Sir, I think it does mean that, but, as I pointed out, we have not received any such demand from the Japanese Government.

Mr. Henderson: Is it the policy of the Government?

The Prime Minister: Certainly.

Mr. Noel-Baker: Will the Prime Minister inform the Japanese Government

that their invasion of China is an act of aggression condemned by the League of Nations with our consent, and a crime against humanity; and that if it is ended all outstanding questions can quite well be settled with Japan?

The Prime Minister: No, Sir; I do not think that that is a very useful suggestion.

Mr. Sorensen: Will the right hon. Gentleman answer the last part of my question in which I asked whether these outbreaks are confined to areas under Japanese influence? In other words, are there outbreaks in other parts of China besides those which are in the neighbourhood of, and under Japanese, control?

The Prime Minister: I think that for the most part they are in towns under Japanese control.

Mr. Sorensen: Are there some outside that area?

The Prime Minister: Not that I am aware of.

Mr. Dalton: Has the Prime Minister any official information concerning reports of incidents in Tokyo against the British Embassy?

The Prime Minister: Yes, Sir; I understand that a large number of people were marching about and demonstrating in front of the British Embassy. A force of Japanese police intervened, and I think that all is quiet there now.

Lieut.-Commander Fletcher: Have any outrages on British subjects at Tientsin occurred since the Prime Minister announced that it must be a condition of the negotiations with Japan that such outrages should cease?

The Prime Minister: I have seen a report that some further restrictions have been placed upon the passage of British subjects in and out of the Concession, but I do not think that there has been anything comparable to those outrages of which we complained before.

Mr. Eden: May I ask my right hon. Friend one question about the conversations, so that it may be quite clear? Do I understand that the Japanese Government have not asked for these conversations to be extended beyond the local issue at Tientsin?

The Prime Minister: I did not quite say that. The conversations between the Ambassador and the Japanese Minister for Foreign Affairs did range over the general background against which the Japanese Government considered that the Tientsin question should be considered, but they have not suggested that the discussion or settlement of those general questions should be a condition of the negotiations.

Sir Archibald Sinclair: Are we to understand that a Japanese-speaking officer has been sent to get into touch with Colonel Spear, and that His Majesty's Government have abandoned their demands for the immediate release of this officer, who is entitled to diplomatic immunity?

The Prime Minister: No, Sir, certainly not. I said that the Ambassador made the strongest representations to the Japanese Government and demanded that he should be released.

Mr. Day: asked the Prime Minister particulars of the protest lodged by the British authorities against the Japanese authorities for encircling three British-owned factories on the north bank of Soochow Creek, China, with wire barricades; and whether the workers at these factories are now permitted to cross the bridges?

Mr. Butler: According to my noble Friend's information, two British factories are affected, the Zoong Sing Mill and the China Car and Foundry Company's premises, together with a Chinese mill under Japanese management. Access to these has for some time been by boat across the Sochow Creek to the mill jetty. This has now been wired off by the Japanese authorities in such a way that it can no longer be used, and similar measures have been adopted at the premises of the China Car and Foundry Company. His Majesty's Consul-General at Shanghai has made oral and written representations to his Japanese colleague and has pressed for permission to rebuild a wooden bridge which formerly existed and which it is understood would not interfere with traffic on the Creek.

Mr. Day: Is any reciprocal action being taken?

Mr. Butler: No, Sir.

Mr. G. Strauss: asked the Prime Minister what was the nature of the representations recently made by the Foreign Office to a bank whose headquarters are in London and whose branch at Shanghai was co-operating with the Japanese authorities in weakening the Chinese Exchange Fund, half of which has been guaranteed by His Majesty's Government?

Mr. Butler: No such representations have been made by the Foreign Office.

Mr. Strauss: Does the right hon. Gentleman mean that no bank has been approached by the Foreign Office because it has been selling, on behalf of the Chinese authorities, Chinese funds, and thereby weakening the Chinese Exchange Fund? Has not a bank been approached by the Bank of England to stop such action?

Mr. Butler: I can speak only for the Foreign Office. No such representation has been made by them.

Mr. Bellenger: Is the right hon. Gentleman aware that a report that such an incident had occurred has appeared in the Press, and will he instruct the Governor of the Bank of England—

Mr. Speaker: The Minister cannot reply to reports in the Press.

Mr. Bellenger: Am I not entitled to ask the Chancellor of the Exchequer whether he realises the danger that might arise from these statements?

Mr. Speaker: They may not be true.

Mr. Noel-Baker: asked the Prime Minister whether His Majesty's Government have yet received any reply from the Japanese Government to their protests concerning the murder of Mr. R. M. Tinkler by Japanese troops at Shanghai?

Mr. Butler: No, Sir.

Mr. Noel-Baker: Have His Majesty's Government asked for the punishment of those who murdered Mr. Tinkler, and the payment of compensation to the relatives?

Mr. Butler: In view of the situation that has arisen and the fact that we have received no reply, the question of further action is under consideration.

Oral Answers to Questions — ANGLO-FRENCH-RUSSIAN CONVERSATIONS.

Mr. Dalton: asked the Prime Minister whether he can now make any further statement on the negotiations between His Majesty's Government and the Government of the Union of Soviet Socialist Republics?

The Prime Minister: Fresh instructions have been sent to His Majesty's-Ambassador at Moscow, but I am not yet in a position to add to recent statements.

Mr. Dalton: If I put the question down on Wednesday will the Prime Minister be able to say more?

The Prime Minister: That does not depend on me.

Oral Answers to Questions — DANZIG.

Mr. Bellenger: asked the Prime Minister whether he now has any report from the League Secretariat concerning his inquiries regarding the importation of arms and ammunition into Danzig?

Mr. Butler: Not yet, Sir.

Mr. Bellenger: Can the right hon. Gentleman say why it was that His Majesty's Government did not obtain this information earlier, when it must be obvious that these importations are taking place?

Mr. Butler: It is a case of applying to the League Secretariat to ask them for a report, and I will certainly consider making further representations to ask that they should send any report at the earliest moment.

Oral Answers to Questions — NEWSPAPER POSTERS AND HEADLINES.

Sir Percy Hurd: asked the Prime Minister whether he is aware of the harmful effect upon international relations of sensational and exaggerated newspaper posters and headlines in a section of the Press; and whether, in the next of his weekly conferences with the Press, the Foreign Secretary will represent this to them with a view to discovering some remedy?

Sir Frank Sanderson: asked the Prime Minister whether his attention has been drawn to the increasing number of misleading newspaper placards, some-

times false and frequently of a sensational character, calculated to have a detrimental effect upon our relations with foreign countries; and will he consider instructing his Department of Information to take this up with the papers responsible?

The Prime Minister: I am glad to take this opportunity of deprecating the display of posters which contain sensational, exaggerated or misleading captions, and which are calculated to give rise to unnecessary anxiety at home and undesirable reactions abroad. The same observations are not infrequently applicable to the headlines in a section of the Press. My Noble Friend through the News Department of the Foreign Office consistently draws the attention of representatives of the Press to these dangers, and I am glad to think that the proprietors and editors of newspapers in this country are aware of them and, with some exceptions, are heedful of the advice offered.

Sir P. Hurd: In regard to these exceptions, will my right hon. Friend say why the Press should not manage its own unruly members as do doctors and lawyers and other people in the professions?

The Prime Minister: I think the Press do for the most part.

Sir William Davison: Would it not be a good thing if my right hon. Friend had a personal conference with the proprietors of newspapers of this country with a view not only to the elimination of these posters, but also of a great deal of what appears in the Press which is not in the national interest?

Mr. Gallacher: Will not the Prime Minister advise these people to take note of the "Daily Worker" and publish the truth?

Oral Answers to Questions — GERMANY AND ITALY.

Mr. A Henderson: asked the Prime Minister whether he has any information as to the number of German military effectives in Italy and Libya, respectively, and as to the establishment of an Italian naval base in the Dodecanese Islands?

Mr. Butler: My Noble Friend's reports do not indicate that there are any German military units in Italy or Libya. There has been an Italian naval base in the Dodecanese for many years past.

Oral Answers to Questions — ITALIAN TYROL (BRITISH SUBJECTS' EXPULSION).

Mr. A. Henderson: asked the Prime Minister whether he will make a further statement regarding the order of the prefect of the province of Bolzano, in Italy, that all foreigners must leave the district; whether he is satisfied that everything is being done to protect the rights of British subjects who have been in permanent residence there; and whether he proposes to take any further action in the matter?

Mr. Kennedy: asked the Prime Minister whether he has received any further information as to the proposed expulsion of all British subjects from the Italian Tyrol, including permanent residents there; and, in particular, what arrangements have been made to enable such British residents to get their property in full out of the country?

Mr. Butler: I would refer the hon. Members to the full reply given to the hon. Members for Govan (Mr. N. Maclean) and Dewsbury (Mr. Riley) on 13th July. His Majesty's Ambassador at Rome and His Majesty's Consul-General at Milan are closely watching developments and are in touch with the appropriate authorities of the Italian Government.

Mr. Henderson: Can the Prime Minister say whether there is any truth in the Italian statement that the British citizens affected by this order have been guilty of espionage?

Mr. Butler: No truth at all as far as we are informed.

Mr. Thorne: Does not this prove that there is no love between Mussolini and Hitler?

Oral Answers to Questions — BRITISH SUBJECTS, VIENNA (JUDICIAL ARREST).

Sir Percy Harris: asked the Prime Minister whether he has any further in formation regarding Miss Church and Mr. John Lennox who are in the hands of the secret police in Vienna; and whether consular officers have yet been allowed to visit Miss Church in the prison hospital?

Mr. Butler: The Acting Consul-General at. Vienna reported on 12th July that Miss Church and Mr. Lennox had been placed

under judicial arrest, but he was unable to ascertain on what date warrants would be issued. The authorities concerned have explained that the delay in issuing warrants is due to the complexity of the case in which some 40 person are said to be involved. Pending the completion of the investigation and the issue of warrants, visits by consular officers have not been allowed.

Sir P. Harris: Will the right hon. Gentleman see that these persons have adequate legal assistance and help, and also the help of the Consular Department, and not be left entirely without help?

Mr. Butler: The importance of these considerations has been appreciated by His Majesty's Government and representations in these terms have been sent to our Consulate.

Sir P. Harris: But have these representations been insisted upon by active steps? If no notice is taken of the representations, it is not of much use to these persons. Will the right hon. Gentleman see that they are supplied immediately with adequate help?

Mr. Butler: His Majesty's Government have done their best in this case. I have given the House the answer we have received on this matter from the German Government and the House can draw its own conclusions.

Mr. Thurtle: Will the Foreign Office take as energetic measures in this respect as they did in regard to the engineers in Russia some time ago?

Lieut.-Commander Fletcher: Can the right hon. Gentleman say whether these two individuals have been allowed to communicate with their relatives since their arrest, and, if not, will he take that matter up with the German authorities?

Mr. Butler: Yes, Sir, I have answered a question on this subject before. I then gave the matter consideration, and gave the hon. and gallant Member the latest information in answer to his question.

Oral Answers to Questions — ANGLO-TURKISH (ARMAMENTS CREDITS) AGREEMENT ACT.

Mr. Bellenger: asked the Secretary to the Overseas Trade Department whether the £6,000,000 credit allotted to


Turkey under the Anglo-Turkish (Armaments Credits) Agreement Act has been entirely utilised, and whether the whole of that sum has been expended in the United Kingdom?

The Secretary for Mines (Mr. Geoffrey Lloyd): I have been asked to reply. Contracts amounting to slightly under £5,000,000 have so far been approved for payment under the terms of the Anglo-Turkish (Armaments Credit) Agreement Act, 1939. In accordance with the terms of the Agreement, this amount will be entirely spent on the purchase of material in the United Kingdom. The amount actually advanced to the Turkish Government so far under the provisions of the Act is £472,310.

Oral Answers to Questions — AGRICULTURE.

POTATOES.

Mr. De la Bère: asked the Minister of Agriculture whether he will consider giving some assistance to the Potato Marketing Board in their propaganda campaign for the increased consumption of potatoes throughout this country?

The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith): The Potato Marketing Board have for some years been carrying on a very effective advertising campaign for potatoes. I am not aware that they require any outside assistance, and in any case I have no funds at my disposal from which I could give financial aid.

Mr. De la Bère: Can my right hon. and gallant Friend tell me why in the case of potato producers they should have to pay the cost of propaganda for the Potato Marketing Board in sending attractive young women to the seaside for advertising purposes? Is the object of this campaign to create plumper and brighter women? If so, why does not the National Fitness Council take a hand?

Sir R. Dorman-Smith: It is the duty of the producers of potatoes to advertise their own products.

Sir T. Moore: asked the Minister of Agriculture whether he is now in a position to state what action he proposes to take with regard to the proposed Amendments to the Potato Marketing Scheme

which were recently put forward by the Potato Marketing Board, and subsequently modified by him; whether he can give an assurance that with these modifications he has been able to meet the objections of the merchants to the original amendments; and when it is proposed to lay the modified amendments before Parliament for approval?

Sir R. Dorman-Smith: As required by the Agricultural Marketing Acts, my right hon. Friend the Secretary of State for Scotland and I have recently laid before Parliament a draft of those proposed amendments to the Potato Marketing Scheme to which objections were raised, as subsequently modified by us in the light of the objections and of the report of the person who held the public inquiry into them. I hope that it will be possible to find time shortly to submit to the House the motion for approval of the draft.

Mr. T. Williams: Can the right hon. Gentleman say whether the report on these amendments will be available to hon. Members before the agreement is brought in?

Sir R. Dorman-Smith: I will look into that.

Mr. John Morgan: Will these amendments involve further restrictions?

HOME-GROWN VEGETABLES (CANNING).

Mr. De la Bère: asked the Minister of Agriculture whether he will consider taking some steps to assist and encourage the home canners to utilise an additional amount of home-grown vegetables, such as peas, beans, carrots, spinach and celery, and fruit, and to stimulate the consumption of these throughout the country?

Sir R. Dorman-Smith: My Department has already endeavoured to encourage the production and consumption of canned fruit and vegetables by introducing and advertising National Mark Schemes for all the principal varieties. These schemes are designed to secure to the consumer a product of guaranteed quality and to assist producers against the competition of imported produce.

FEEDING-STUFFS (PRICES).

Mr. De la Bère: asked the Minister of Agriculture whether he will circularize


the various corn trade associations throughout the country, drawing their attention to the many instances of the uneconomic price at which feeding-stuffs are offered to the farmers throughout the country, and to the price which farmers have to pay at present for their feeding supplies which is excessive and unrelated to the low price at which wheat is selling throughout the world?

Sir R. Dorman-Smith: I am unable to agree that my hon. Friend's assumptions with respect to the prices of feeding-stuffs are in accord with the existing position. Almost all the principal feeding-stuffs have been cheaper during the past three months than in the corresponding periods of the last two years, and I am satisfied that there are adequate supplies of feeding-stuffs available to farmers at reasonable prices. The question of taking action such as that suggested by my hon. Friend does not, therefore, arise.

Mr. De la Bère: Is my right hon. and gallant Friend aware that the present price of wheat is the lowest price on record for 150 years? Why should the farmers pay £6 or 7 for their wheat offals when the price of wheat is only £5? It is absolutely ridiculous. Will my right hon. and gallant Friend look into the matter?

Sir R. Dorman-Smith: I have looked into it. Perhaps my hon. Friend will come to see me about it afterwards.

Mr, J. Morgan: Is it not a fact that feeding-stuff prices based upon wheat are 40 percent. above the wheat parity price? Does the right hon. and gallant Gentleman consider that a reasonable relationship?

Sir R. Dorman-Smith: This question was thrashed out the other night on the Motion for the Adjournment. It is not a new fact that in certain circumstances the price of wheat offals can be above the price of wheat itself. The prices of manufacture do, in fact, stay up, and have tended to rise. When the price of wheat comes down it accentuates the position.

Mr. De la Bère: Why does not the price of bread come down?

Oral Answers to Questions — HERRING SHOALS (AERIAL SPOTTING).

Mr. R. Gibson: asked the Minister of Agriculture whether he has now heard

from the Herring Industry Board regarding the report of Mr. Sam Reid, Greenock, and Mr. G. W. B. Leslie, Sumburgh, relative to spotting herring shoals from the air; and whether he will now make a statement on the effectiveness of such spotting and on the provision of a wireless-equipped aeroplane for this work?

Sir R. Dorman Smith: The report to which the hon. Member refers deals with some experimental aerial spotting of herring which was done in the Shetland area last year, with the aid of a contribution from the Herring Industry Board. I understand that the board are (not satisfied that the value of aerial spotting is proved, but are desirous of carrying out further experiments.

Oral Answers to Questions — POST OFFICE.

FACILITIES, WHITEFIELD, LANCASHIRE.

Mr. F. Anderson: asked the Postmaster-General how many postal packets and parcels were handled during the past six months at the post office at Whitefield, Lancashire; the number of houses and other premises served by this post office and the number of houses and premises served by it five years ago?

The Postmaster-General (Major Tryon): It is estimated that about 1,422,000 postal packets and 17,000 parcels were handled during the past six months at the post office at Whitefield, Lancashire, and that this office now serves about 4,480 houses and other premises as compared with 3,500 houses and other premises served by it in 1934. As I promised the hon. Member for Heywood and Radcliffe (Mr. Porritt) on 25th July last, the position at Whitefield has been investigated and, while the volume of business is still insufficient to justify the provision of a Crown Office, a number of additional facilities have been provided.

Mr. Anderson: In view of these figures is there not justification for a sub-post office half-way between the Radcliffe Borough and Whitefield, so that people will not have to walk 1½ to 2 miles in order to obtain stamps and postal orders?

Major Tryon: That, of course, is an alternative, and it will be considered.

TELEPHONE KIOSKS.

Mr. Anderson: asked the Postmaster- General how many telephone kiosks are now in use in the country; how much was collected during the past six months from these kiosks for telephone calls; and what arrangements are made to check the amounts so collected from the telephone kiosks?

Major Tryon: The number of telephone kiosks in use in the United Kingdom at the end of May last was 33,027, and the receipts for the six months ended the 31st March last amounted to £695,198. A check on the receipts is imposed by comparing the amounts collected with the exchange records of the calls made.

Mr. Anderson: I take it that at every one of the kiosks visited there is some check upon the amount taken from the kiosk?

Major Tryon: Yes, Sir. The checks are made with the records of the exchanges with which they are connected.

Mr. Anderson: Is it not a fact that in some places this work is done by postmen, who simply tipple the money into a bag and have no more idea than the man in the moon where the money comes from?

Major Tryon: I cannot confirm the hon. Member's statement. This checking work is not done by postmen, in any case, but by the telephone staff.

ANGLO-CANADIAN MAILS.

Sir P. Hurd: asked the Postmaster- General whether he is aware of the continued tardiness in the transit of Anglo- Canadian mails, in some cases 11 to 15 days being occupied between Toronto and London; and whether he will confer with the Dominion Government and the transport companies concerned in order to effect a remedy?

Major Tryon: I am aware that the normal period of transmission of letters from Canada to this country may be considerably exceeded in cases where they are posted too late for conveyance by one ship and have to wait several days for the next direct outlet. I understand, however, that facilities exist whereby specially superscribed letters may be sent via New York for conveyance by the fast ships leaving that port for this country.
Information as to the most advantageous outlets for correspondence can no doubt be obtained by the posters at any time on inquiry of the Canadian Post Office. As I stated in reply to my hon. Friend's question on 26th May last, the British Post Office has no voice in the arrangements for the despatch of mails from Canada; but I am bringing his representations to the notice of the Canadian Post Office.

GREETINGS TELEGRAMS.

Captain Sir William Brass: asked the Postmaster-General whether he has any recent information regarding the ex tent to which the greetings telegram ser vice is used by the public?

Major Tryon: The popularity of this service shows remarkable growth. At present over 100,000 greetings telegrams are being sent every week. This is an increase of 30 per cent, compared with a year ago. During the last 12 months nearly 4,500,000 greetings telegrams have been sent.

TELEPHONE TRAFFIC (UNITED KINGDOM AND OTHER COUNTRIES).

Sir W. Brass: asked the Postmaster- General whether he is able to say how the total telephone traffic between the United Kingdom and other countries during the 12 months ended 31st March last com pares with the total traffic for the previous 12 months?

Major Tryon: The total telephone traffic between this country and other countries during the 12 months ended 31st March last amounted to 12,824,000 minutes, compared with a total of 11,746,000 minutes during the previous 12 months. This represents an increase of just over 9 per cent.

HIS MAJESTY'S SUBMARINE "THETIS" (TELEGRAM, DELIVERY).

Mr. Viant: asked the Postmaster- General whether he can give the reasons for the long delay by his Department in delivering the telegram despatched to Gosport on the occasion of the "Thetis" disaster?

Major Tryon: The question raised by the hon. Member is being inquired into by the Tribunal presided over by Mr. Justice Bucknill, and I do not think it would be appropriate for me to say anything on the


matter at this stage, I have arranged for a full statement of the facts to be sent for the information of the Tribunal.

Oral Answers to Questions — WIRELESS RECEIVING LICENCES.

Major Neven-Spence: asked the Postmaster-General what increase has taken place in the number of wireless receiving licences during the last 12 months; how many prosecutions for evasion of the licence fee have been undertaken during the same period; and with what result?

Major Tryon: The number of wireless receiving licences reached 9,000,000 last month. The number held on 30th June, 1939, was about 9,009,700, representing an increase of about 371,600 over the corresponding figure on 30th June, 1938. During this period of 12 months 5,805 persons were prosecuted for using wireless receiving apparatus without a licence, and all but 12 of these prosecutions were successful.

Mr. R. Gibson: I take it that those figures are for the United Kingdom? Can the Postmaster-General give the separate figures for Scotland?

Major Tryon: These are the figures for the United Kingdom in connection with the B.B.C.

Mr. Sorensen: I take it that the figure would be much bigger for Scotland?

Oral Answers to Questions — REARMAMENT (CONTRACTING COMPANIES. MEMBERS OF PARLIAMENT).

Mr. Gallacher: asked the Prime Minister whether he will consider taking the necessary steps to secure that Members of this House are prevented from being financially interested, as directors or shareholders, of public companies engaged in rearmament work?

The Prime Minister: No, Sir.

Mr. Gallacher: Is the Prime Minister aware of the feelings which these revelations have created, and will he not do something to satisfy the feelings which have been aroused in the country at these revelations?

Oral Answers to Questions — WHITEHALL, OLD PALACE.

Mr. Hannah: asked the First Commissioner of Works how much of the old Palace of Whitehall it has been found possible to preserve in reoccupying the site; and what steps are being taken to incorporate the river embankment wall and steps constructed by Sir Christopher Wren?

The First Commissioner of Works (Mr. Ramsbotham): The Wolsey wine-cellar will be preserved in the new building. The steps and river wall of Queen Mary's terrace, constructed by Sir Christopher Wren, will be preserved in situ outside the building.

Oral Answers to Questions — ACQUISITION OF LAND, SOUTHPORT.

Mr. J. Henderson: asked the Minister of Health whether the Southport Corporation have now completed the acquisition under compulsory powers of the land and properties in Lord Street comprising 4,437 square yards and 3,144 square yards, respectively, for boulevard extension; if so, what price was paid for each area; and what was the rateable value of each previous to acquisition?

The Parliamentary Secretary to the Ministry of Health (Miss Horsbrugh): I am informed that the acquisition of these properties has not yet been completed.

Oral Answers to Questions — CHANNEL TUNNEL.

Mr. Thurtle: asked the Prime Minister whether, in considering plans for providing useful alternative employment when the present rearmament scheme comes to an end, the Government will have regard to the merits of the Channel tunnel project?

The Prime Minister: I have nothing to add to the answer which I gave to the hon. Member for Central Southwark (Mr. Day) on 1st November last, a copy of which I am sending to the hon. Member.

Mr. Thurtle: Am I to take it that the reply discloses the fact that the right hon. Gentleman has not closed his mind stubbornly against this proposal?

The Prime Minister: The hon. Member knows that I am never stubborn. If


he will look at the report of the committee which investigated this matter he will see that they consider that no considerable amount of employment would be provided by it.

Mr. G. Griffiths: Old age pensioners think he is stubborn.

Mr. Cocks: So does the right hon. Member for Epping (Mr. Churchill).

Oral Answers to Questions — CIVIL DEFENCE.

PROPAGANDA.

Mr. Vernon Bartlett: asked the Lord Privy Seal whether, in order to remove the effect on the public mind of the depressing slogan, "We must be prepared," he will arrange to substitute for it the slogan," We are prepared," in view of the satisfactory state of our present rearmament?

The Lord Privy Seal (Sir John Anderson): I doubt whether the implication in the first part of the question would be generally accepted. As regards the second part, this is a National Service slogan and, while we are all proud of the response which has already been made to the call to National Service, the time has not yet come when our efforts can be relaxed.

Mr. Bartlett: May I ask the right hon. Gentleman to consider whether, in point of fact, the publication of greater details of our defensive arrangements, not necessarily military, would not only have a very valuable effect on various statesmen abroad but would also encourage recruiting in this country?

Sir J. Anderson: Yes, Sir, and already statements have been issued from time to time on the lines suggested by the hon. Member.

COAL (EMERGENCY PROVISIONS).

Mr. Arthur Greenwood: (by Private Notice) asked the Secretary for Mines whether he can make a statement on the measures which have been taken by his Department for regulation of coal supplies in time of war?

Mr. Lloyd: Yes, Sir. In view of the vital importance of coal in war time, comprehensive plans have been prepared in consultation with those concerned for the

maintenance of the production of coal in time of war and for the control of the distribution and price of coal, coke and manufactured fuel. To ensure the maintenance of production, the position of coalmining in the Schedule of Reserved Occupations has been safeguarded, while measures have been taken designed to secure the continued supply of the necessary machinery and materials under war conditions. Control of supplies and pithead prices will be exercised through the existing coal marketing schemes and arrangements have been made to deal with the control of supplies in the consuming districts as well as at the point of production. A system of priorities will be established to ensure the supply of coal to essential industries, and a scheme for regulating supplies of coal, gas and electricity to domestic and other small consumers has been prepared and will be administered through the local authorities.
The Departmental staff required to operate the schemes in an emergency will consist of coal supplies officers in the producing areas, divisional and assistant divisional coal officers in the Civil Defence regional areas, and coal export officers at the ports. These officers have all been appointed and the organisation could, if necessary, be brought into immediate operation.
I have indicated the main lines of the scheme in this answer, but for the convenience of hon. Members I propose to circulate a fuller statement in the OFFICIAL REPORT.

Mr. Greenwood: While thanking the Minister for arranging to publish a further statement in the Official Report, may I ask him, first, whether on the proposals the mineworkers' organisations were consulted; secondly, whether the Cooperative societies, which are very large distributors of coal in this country are associated with the scheme; and thirdly— it is very difficult to grasp these things when they are read out—whether, while desiring to minimise the amount of luxury production, there will be no unnecessary hardship to small consumers of coal and, primarily, domestic consumers of coal?

Mr. Lloyd: Yes, Sir, the Mineworkers' Federation was fully consulted with regard to man-power and the Co-operative societies, as important distributors of coal, have been consulted throughout in the preparation of the scheme and would


play an important part in it. With regard to the third question, the plan for regulating supplies to domestic consumers by a rationing scheme is really a precautionary plan to restrict unnecessary and luxury consumption of coal in time of war. We have taken the view that there is no substantial luxury or unnecessary element in the consumption of coal by small consumers of coal, and, therefore, we have made arrangements by which the bulk of the working class will suffer no reduction of the amount of coal which they receive.

Sir A. Sinclair: Has the hon. Gentleman and his Department considered the contribution which might be made towards the provision of fuel, particularly to small consumers, from the large deposits of peat in Scotland, as well as in England and Wales?

Mr. Lloyd: Yes, Sir, of course.

Mr. G. Macdonald: I take it for granted that consideration has been given to the question of the relationship between exports of coal in peace time and in war time as it will affect home supplies, and has that been done in consultation with the Mineworkers' Federation?

Mr. Lloyd: It is primarily the exporters and distributors who have been consulted with regard to that particular aspect, which I think the hon. Gentleman will agree is more appropriate to them, but, of course, the very purpose of the export officers at the ports would be to deal with that.

Mr. Ellis Smith: Have steps been taken, or will steps be taken to secure adequate stocks of coal for our own purposes and for those who will be associated with us in the event of war?

Mr. Lloyd: Yes, Sir. One of the purposes of the coal export officers at the ports would be to direct the export of coal in conformity with the policy of the Government, in the national interests.

Mr. G. Griffiths: If control of the mines is still to be left in the hands of the coal-owners, as in the last War, will the Minister see that it will not be so lax as it was then?

Mr. Lloyd: I do not think that this scheme, which provides for price control, can be regarded as lax.

Mr. Griffiths: I am not so much bothered about the price control. I worked in the pits during the War, and I am satisfied that thousands of pounds went the wrong road. Will the Minister see that that does not happen again?

Mr. Lloyd: We will do our best.

Following is the statement:

Organisation for the Control of Coal in War Time.

The Mines Department have made comprehensive arrangements in regard to the production, distribution and sale of coal in case of emergency.

The production of coal depends primarily on man power and special consideration has therefore been given to the coal mining industry in the Schedule of Reserved Occupations. The supply of machinery and materials is also of great importance, and steps have been taken with a view to the maintenance of production in war time in spite of inevitable changes in sources of supply and interruptions which must be anticipated.

Production.

Control of supplies at the point of production will be exercised through the machinery now in existence by virtue of the statutory coal-marketing schemes. Those schemes will be amended as necessary to meet war-time conditions. There will be in each coalfield an officer of the Mines Department, drawn from the industry itself and thus familiar with its working, who will be known as a coal supplies officer. His main duties will be to secure, in collaboration with the mining indust1ry, that the required quantities and qualities of coal are produced, whether for inland or export, and that they go forward promptly.

Distribution.

The interests of consumers will be looked after more directly by divisional coal officers, stationed in the various regions under the Civil Defence Emergency Scheme. These officers and their assistants stationed in different parts of the regions will be available to help consumers in cases of difficulty. A number of advisory committees of distributors will be set up in each region as it is hoped that, with their co-operation and assistance it will be possible to overcome many difficulties locally. Statutory powers of requisition will however be available to enable serious cases of difficulty in regard to supplies to be dealt with if voluntary effort fails.

Regulation of Supplies.

A scheme for regulating supplies by means of a rationing scheme on the basis of a proportion of consumption in a past period of coal, gas and electricity, by domestic consumers, offices, clubs, institutions and other small consumers has been prepared for introduction if necessary in the event of war. This scheme will be administered through local authorities, who have been asked to appoint local fuel overseers for the purpose. To take advantage of the co-operation and


assistance offered by the coal distributors (including co-operative societies) and the suppliers of gas and electricity, the local authorities will also appoint local advisory committees representing those interests, and these committees will be able to advise the local fuel overseer on all matters which he may refer to them.

Supplies to larger industrial consumers will be regulated by a priority system to ensure that in the event of a shortage available supplies are directed to those works whose continuance in war time is of greatest importance to the nation.

Control of Prices.

Prices of coal at the pithead will be controlled through the machinery of the statutory coal-marketing schemes. As comparable machinery is not available for controlling distributors' and export prices, control will' be exercised under Statutory Orders made for the purpose.

Export.

The export of coal, save with the permission of the Government, will be prohibited. In each of the principal shipping areas there will be stationed coal export officers of the Mines Department to whom all applications for permission to export coal must be addressed.

General.

The organisation necessary to give effect to the foregoing is in being and coal supplies officers, divisional and assistant divisional coal officers and coal export officers have been appointed and are aware of their functions in the event of war.

Oral Answers to Questions — FURNITURE TRADE.

Mr. McEntee: asked the Minister of Labour whether the negotiations by his Department with the trade unions and the employers' associations in the furniture trade are completed; and will he make a statement in regard to the purpose of the negotiations, and the progress made or success achieved?

The Minister of Labour (Mr. Ernest Brown): The purpose of the discussions to which the hon. Member refers was to find a means by which the unsatisfactory conditions which exist in certain sections of the trade could be effectively improved. The discussions which have taken place have made it clear that it is impossible, having regard to the limited extent of organisation of employers and workpeople, to achieve effective regulation of the wages and working conditions by voluntary joint machinery. I am, therefore, of opinion that it is expedient to apply the Trade Boards Acts to the trade and a conference of all the organisations concerned is to be convened for the

purpose of discussing the various questions arising from this decision.

Mr. McEntee: Can the right hon. Gentleman say what organisation was responsible for the inability of his Department to get an extension of voluntary agreements?

Mr. Brown: That is an entirely different question. I hope the hon. Member, will see that if we get the parties concerned around a table we shall get the facts brought out.

Oral Answers to Questions — EMPLOYMENT EXCHANGE FACILITIES, INCE.

Mr. Gordon Macdonald: asked the Minister of Labour whether he has considered the communication from the urban district council of Ince-in-Maker- field, requesting consideration being given to the establishment of a separate Employment Exchange for Ince; and whether he is able to agree to this suggestion?

Mr. E. Brown: The letter from the urban district council was received by me on 14th July and inquiries are being made into the position which will arise when the new exchange premises at Hindley are occupied. As soon as these are completed I will communicate with the hon. Member.

Mr. Macdonald: Is the right hon. Gentleman aware that the new premises at Hindley will necessitate long distances having to be travelled by many of the unemployed?

Mr. Brown: The point of the extra travelling is one upon which I have asked them to report to me.

Oral Answers to Questions — PROPOSED NEW SECONDARY SCHOOL, CONSETT.

Mr. David Adams: asked the Parliamentary Secretary to the Board of Education whether, in view of the delays occasioned by the Board in connection with the application for permission to erect a new secondary school at Consett, seeing that authorised tenders have been before the Board for acceptance since February of this year, and that such pro vision has been pronounced urgent by all concerned, including His Majesty's in spectors for years past, he will obtain a decision of the Board thereon without delay?

The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): I will certainly see that a decision is given in this matter with the least possible delay, but the facts of the case show clearly that the delay up to now in authorising the acceptance of tenders has not been due to the Board.

Mr. Adams: The Minister will be aware that in correspondence with the council the Board used the expression "We regret the delay."

Mr. Lindsay: There was some unavoidable delay when the Board was moving from Whitehall to Kingsway, but there was a delay of five or six months on the part of the local authority, and I cannot accept any responsibility for that.

Oral Answers to Questions — BRITISH ARMY.

UNDERGROUND OIL STORAGE.

Mr. Day: asked the Secretary of State for War the number of underground oil-storage tanks or reservoirs that have been constructed along the Thames estuary for the use of his Department in emergency; whether any of them have been constructed beneath the chalk hills; and their estimated cost?

The Financial Secretary to the War Office (Sir Victor Warrender): The hon. Member will hardly expect me to make any statement on this subject.

Mr. Day: Can the Minister say whether in the case of emergency it will be possible to make a statement?

Sir V. Warrender: The hon. Member does not seem to realise that there are some things which should never see the light of day.

AMMUNITION BUILDINGS, RAINFORD (CONTRACT).

Mr. G. Macdonald: asked the Secretary of State for War what building contractors were given the opportunity of tendering for the ammunition store and buildings at Rainford, near St. Helens, Lancashire; and whether all the contractors in the adjacent districts were given the same opportunity?

Sir V. Warrender: I regret I have not been able to obtain particulars in the time available, but I will write to the hon. Member as soon as possible.

Mr. Macdonald: Is the Minister aware that in this case no Wigan firm was asked to tender; that these firms arc being left out in the cold and that preferential treatment is being given to other firms?

Sir V. Warrender: I am anxious to make the fullest inquiries.

CHURCH PARADES (MILITIAMEN).

Mr. Sorensen: asked the Secretary of State for War whether, in view of the decision not to hold a compulsory church parade for militiamen on their first Sunday in training, he will entirely abolish compulsory church parades for militiamen, excepting for ceremonial purposes, whilst giving every facility for voluntary attendance at church, or for other forms of religious observance that do not interfere with military duties?

Sir V. Warrender: The decision referred to in the question was no doubt given locally in order to allow the militiamen more time to settle down in their new surroundings. Such an arrangement is not unusual in the Army on a change of station. It affords, however, no reason for a general departure from the regulation that militiamen will attend parade services.

Mr. Sorensen: Does not the Financial Secretary appreciate the fact that an attempt to impose religion on anyone defeats its own object, and is he aware that last Sunday numbers of these militiamen were none the worse for being allowed to decide whether they would go to Church or not? Will he not take that as a precedent and establish the right for men to choose for themselves how and where they shall worship?

Sir John Haslam: Is it not better for young men of 20 to attend church?

Sir V. Warrender: Compulsory church parade has been customary in the Army for a long time, and my right hon. Friend and I see no reason to change it.

Mr. Sorensen: Does not the hon. Member realise that there is a distinction between men who voluntarily choose to join the Army and accept all its implications, and these conscripts?

TERRITORIALS (DEPENDANTS).

Mr. Stephen: asked the Secretary of State for War whether he is aware that no provision is made for the grant of dependants' allowances to dependants, such as


widowed mothers, of Territorials who are embodied for a month's service in the Regular Army; and, as this is causing great hardship, what steps he intends to take to avoid such hardships to the dependants of those men in the future?

Sir V. Warrender: In view of the comparatively short period of service in excess of their normal camp period for which Territorials are being called up, it was not considered necessary to make provision for a special dependants' allowance for them. In cases which are not met by the relief in respect of civil liabilities given by the Orders-in-Council or by the grant of leave, Territorials may apply for special monetary assistance, and such applications will be considered by the Military Service (Special Allowances) Advisory Committee.

Oral Answers to Questions — INCOME TAX.

Mr. Thorne: asked the Chancellor of the Exchequer the total income assessed for taxation for the years ended March, 1935, 1936, 1937, and 1938?

The Financial Secretary to the Treasury (Captain Crookshank): I would refer the hon. Member to Tables 39, 40 and 41 of the Eighty-First Report of the Commissioners of Inland Revenue (Command Paper No. 5865 of 1939) where he will find particulars of the income assessed to Income Tax in each year from 1934–35 to 1937–38. Similar information as regards the income assessed to Surtax will be found in Table 55 of the same report.

Mr. Thorne: Can the Financial Secretary tell me where I can find the information about the number of people who have died with less than £50 worth of property?

Captain Crookshank: This Command Paper is full of the most interesting information.

Oral Answers to Questions — UNLIGHTED TRUNK ROADS (STREET LAMPS).

Sir W. Brass: asked the Minister of Transport what action he takes to prevent local authorities imposing a speed limit on an unlighted trunk road by erecting street lamps and thus placing the road in a built-up area within the meaning of the Road Traffic Act, 1934?

The Parliamentary Secretary to the Ministry of Transport (Mr. Bernays): If local authorities wish to erect street lamps on unlighted trunk roads without grant from the Road Fund, they are free to do so without reference to my right hon. Friend. Where the effect of the installation of lamps is to impose the speed limit on lengths of road which are not in his view built-up, my right hon. Friend can, and does, make orders for the de-restriction of those lengths.

Sir W. Brass: If I give my hon. Friend an illustration of what has taken place in certain areas, will he look into it?

Mr. Bernays: I should be glad to do so.

Viscountess Astor: Will my hon. Friend consider taking down the awful Belisha beacons which have done no good at all, and are eyesores?

Mr. Leach: Will the hon. Gentleman undertake, in the interests of public safety, not to take any action of the sort which he is invited to do in the question?

BUSINESS OF THE HOUSE.

Mr. Greenwood: May I ask the Prime Minister, first, for what purpose it is proposed to suspend the Eleven o'Clock Rule to-night; secondly, whether he can make any statement as to Friday's Business; and thirdly, when he will be in a position to make a statement with regard to outstanding Business to be taken before the Adjournment of the House for the Summer Recess?

The Prime Minister: I will answer the right hon. Gentleman's last question first. On Wednesday I shall move a Motion at the beginning of Business to reduce the number of Allotted Supply Days this Session from 20 to 16. I will then make a full statement on the outstanding Business which the Government must ask the House to dispose of before the Adjournment for the Summer Recess.
To-night, it is proposed to suspend the Eleven o'Clock Rule in order to obtain the Business up to and including the Third Order on the Paper. We also propose to take the Report stage of the Overseas Trade Guarantees Money Resolution, and we hope that there will also be an opportunity of taking the Committee stage of the Bill.
The Business on Friday will be: Supply; Committee [13th Allotted Day]: Home Office Vote: Debate on the Hours of Juvenile Labour.
I would like also to refer to the Business for to-morrow. In making the Business statement last Thursday, questions were put to me about proceedings on the Agricultural Development Bill. A reply which I gave might suggest that the procedure of the House did not allow the Third Reading being taken on the same day as the Report stage, in the event of Amendments being made. This, of course, is not the case. In fact, it is not unusual to take the Third Reading of Bills immediately after the Report stage although they may have been amended on the earlier stage. In view of the late period of the Session and the necessity to pass the Agricultural Development Bill into law before the Summer Recess, we must ask the House to dispose of the Report and Third Reading of the Bill tomorrow, so that it may go to another place.

Mr, Maxton: Is it not unprecedented to cut down the number of Supply days?

The Prime Minister: No, Sir, it is not unprecedented. I can give precedents to the House when the Motion is submitted.

Mr. Tinker: Has the Prime Minister given any consideration to the appeal which has been made for a day to discuss old age pensions?

The Prime Minister: I have already answered that question.

Mr. R. C. Morrison: Can the right hon. Gentleman say whether these four Supply days are definitely cut out altogether, or whether it is intended to include them in the remaining part of the Session, in the autumn.

The Prime Minister: That is not possible.

Sir A. Sinclair: Is there any precedent for cutting out Supply days except in war time, and on one occasion when a General Election was held in the middle of the summer?

The Prime Minister: I do not want to argue the question now. We shall have to discuss it on Wednesday, but there is a precedent.

Mr. Maxton: Do I understand that a Motion will be put down for discussion on Wednesday?

The Prime Minister: indicated assent.

Motion made, and Question put,
 That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)." — [The Prime Minister.]

The House divided: Ayes,188;Noes, 106.

Howitt, Dr. A. B.
Morrison, G. A. (Scottish Univ's.)
Simon, Rt. Hon. Sir J. A.


Hudson, Capt. A. U. M. (Hack., N.)
Morrison, Rt. Hon. W. S. (Cirencester)
Smiles, Lieut.-Colonel Sir W. D.


Hunloke, H. P.
Muirhead, Lt.-Col. A. J.
Smith, Bracewell (Dulwish)


Hunter, T.
Munro, P.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Hurd, Sir P. A.
Neven-Spence, Major B. H. H.
Stewart, J. Henderson (Fife, E.)


Jarvis, Sir J. J.
Nioolson, Hon. H. G.
Stewart, William J. (Belfast, S.)


Jennings, R.
O'Connor, Sir Terence J.
Strauss, H. G. (Norwich)


Keeling, E. H.
O'Neill, Rt. Hon. Sir Hugh
Strickland, Captain W. F.


Kellett, Major E.O.
Orr-Ewing, I. L.
Stuart, Hon. J. (Moray and Nairn)


Kerr, Sir John Graham (Soo'sh Univs.)
Palmer, G. E. H.
Sueter, Rear-Admiral Sir M. F.


Lambert, Rt. Hon. G.
Patrick, C. M.
Sutcliffe, H.


Lelghton, Major B. E. P.
Peake,O.
Thomas, J. P. L.


Liddall. W. S.
Pickthorn, K. W. M.
Thorneycroft, G. E. P.


Lindsay, K. M.
Pilkington, R.
Thornton-Kemslay, C. N.


Lipson, D. L.
Pownall, Lt.-Col. Sir Assheton
Titehfield, Marquess of


Little, J.
Raikes, H. V. A. M.
Touche, G. C.


Lloyd, G. W.
Ramsay, Captain A. H. M.
Tryon, Major Rt. Hon. G. C.


Looker-Lampson, Comdr.O. S.
Ramsbotham, Rt. Hon. H.
Wallace, Capt. Rt. Hon. Euan


Lucas, Major Sir J. M.
Rathbone, Eleanor (English Univ's.)
Ward, Lieut-Col. Sir A. L. (Hull)


Mabane, W. (Huddersfield)
Rathbone, J. R. (Bodmin)
Ward, Irene M. B. (Wallsend)


M'Connell, Sir J.
Read, A. C. (Exeter)
Wardlaw-Milne, Sir J. S.


McCorquodale, M. S.
Reed, Sir H. S. (Aylesbury)
Warrender, Sir V.


Macdonald, Capt. P. (lsle of Wight)
Reld, J. S. C. (Hillhead)
Waterhouse, Captain C.


Macnamara, Lieut.-Colonel J. R. J.
Ramer, J. R.
Wells, Sir Sydney


Maitland, Sir Adam
Rickards, G. W. (Skipton)
Whiteley, Major J. P. (Buckingham)


Manningham-Bullar, Sir M.
Rosbotham, Sir T.
Wickham, Lt.-Col. E. T. R.


Margesson, Capt. Rt. Hon. H. D. R.
Ross, Major Sir R. D. (Londonderry)
Winterton, Rt. Hon. Earl


Markham, S. F.
Royds, Admiral Sir P. M. R.
Wise, A. R.


Marsden, Commander A.
Russell, Sir Alexander
Womersley, Sir W. J.


Mason, Lt.-Col. Hon. G. K. M.
Russell, S. H. M. (Darwen)
Wood, Hon. C. I. C.


Mellor, Sir J. S. P. (Tamworth)
Salmon, Sir I.
Young, A. S. L. (Partick)


Mitchell, Sir W. Lane (Streatham)
Salter, Sir J. Arthur (Oxford U.)



Moore, Lieut.-Col. Sir T. C. R.
Sanderson, Sir F. B.
TELLERS FOR THE AYES— 


Morgan, R. H. (Worcester, Stourbridge)
Scott, Lord William
Lieut.-Colonel Kerr and


Morris-Jones, Sir Henry
Selley, H. R.
Captain McEwen




NOES.


Acland, Sir R. T. D.
Gibson, R. (Greenock)
Pethick-Lawrence, Rt. Hon. F. W.


Adams, D. (Consett)
Green, W. H. (Deptford)
Pritt, D. N.


Adams, D. M. (Poplar, S.)
Greenwood, Rt. Hon. A.
Ridley, G.


Adamson, Jennie L. (Dartford)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Ritson, J.


Adamson, W. M.
Griffiths, G. A. (Hemsworth)
Rothschild, J. A. de


Alexander, Rt. Hon. A. V. (H'lsbr.)
Griffiths, J. (Llanelly)
Sanders, W. S.


Ammon, C. G.
Groves, T. E.
Seely, Sir H. M.


Anderson, F. (Whitehaven)
Guest, Dr. L. H. (Islington, N.)
Shinwell, E.


Banfield, J. W.
Hall, J. H. (Whitechapel)
Silkin, L.


Barnes, A. J.
Hardie, Agnes
Simpson, F. B.


Barr, J.
Harris, Sir P. A.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Batey, J.
Hayday, A,
Smith, Ban (Rotherhithe)


Beaumont, H. (Batley)
Henderson, A. (Kingswinford)
Smith, E. (Stoke)


Bellenger, F. J.
Henderson, J. (Ardwick)
Smith, Rt. Hon. H. B. Lees (K'ly)


Brown, C. (Mansfield)
Henderson, T. (Tradeston)
Smith, T. (Normanton)


Burke, W. A.
Hopkin, D.
Sorensen, R. W.


Charleton, H. C.
Horabin, T. L.
Stephen, C.


Chater, D.
Jenkins, A. (Pontypool)
Stewart, W. J. (H'ght'n-le-Sp'ng)


CIuse, W. S.
John, W.
Strauss, G. R. (Lambeth, N.)


Cooks, F. S.
Jones, A. C. (Shipley)
Summerskill, Dr. Edith


Collindridge, F.
Kennedy, Rt. Hon. T.
Taylor, R. J. (Morpeth)


Cove, W. G.
Kirby, B. V.
Thorne, W.


Daggar, G.
Lansbury, Rt. Hon. G.
Thurtle, E.


Davies, R, J. (Westhoughton)
Leach, W.
Tinker, J. J.


Day. H.
Logan, D. G.
Viant, S. P.


Dobbie, W.
Macdonald, G. (Ince)
Walker, J.


Edwards, N. (Caerphilly)
McEntee, V. La T.
Wedgwood, Rt. Hon. J. C.


Evans, D.O. (Cardigan)
MacLaren, A.
White, H. Graham


Fletcher, Lt.-Comdr. R. T. H.
Marshall, F.
Williams, E. J. (Ogmore)


Foot, D. M.
Maxton, J.
Williams, T. (Don Valley)


Franker, D.
Messer, F,
Wilmot, John


Gallacher, W.
Montague, F.
Windsor, W. (Hull, C,)


Gardner, B. W.
Morgan, J. (York, W.R., Doncaster)
Woods, G. S. (Finsbury)


Garro Jones, G. M.
Morrison, R. C. (Tottenham, N.)
Young, Sir R. (Newton)


George, Major G. Lloyd (Pembroke)
Noel-Baker, P. J.



George, Megan Lloyd (Anglesey)
Parker, J.
TELLERS FOR THE NOES. —




Mr. Whiteley and Mr. Mathers.

NEW MEMBER SWORN.

Thomas Lewis Horabin, Esquire, for the County of Cornwall (Northern Division).

ADMINISTRATION OF JUSTICE (EMERGENCY PROVISIONS) (SCOTLAND) BILL [Lords].

Read the First time; to be read a Second time upon Thursday, and to be printed. [Bill 201.]

MESSAGE FROM THE LORDS.

That they have agreed to, —

Post Office and Telegraph (Money) Bill, without Amendment.

STANDING ORDERS.

Resolution reported from the Select Committee;
 That, in the case of the Senior Public Elementary Schools (Liverpool) Bill, the Standing Orders ought to be dispensed with: —That the Bill be permitted to proceed.

Orders of the Day — WAR RISKS INSURANCE BILL.

Order for Second Reading read.

3.51 p.m.

The President of the Board of Trade (Mr. Oliver Stanley): I beg to move, "That the Bill be now read a Second time."
This Bill is, of course, just as much an emergency Measure as any of that seemingly unending series of war Measures which this House has been considering in the last few months, dealing with air-raid precautions, military training, the Bill setting up a Ministry of Supply, and so on. All of them, including this Bill, are designed in one way or other to fit this country for an emergency should it ever arise. This particular Bill deals with the losses which, in one form or another, this country would have to incur in time of war, and all of us here, I think, will agree that it would be foolish optimism to pretend that if that emergency ever were to occur, the losses consequent upon it would not be heavy. It is foolish to delude ourselves by the idea that war to-day is what perhaps it may have been 100 years ago, an adventure undertaken, shared in by only a small proportion of the population, many miles from our shores and quite outside the stream of ordinary life, which went on almost unnoticed. In such an emergency in the years to come there certainly would not be a twentieth century Jane Austen, who could write a whole series of novels, covering exactly the period of the Peninsula War, and in those novels only once make one indirect allusion to the fact that all that time a war in which her country was engaged was going on. War, if it comes now, will be something quite different. It will not be many miles away; it will be here, on the spot, and our familiar cities will be the trenches of the new war and we and our women and children will be in the front line. I do not think it is any good glossing over those facts. It is much better that we and the country should realise them and that, realising them, we should still claim that, with all its added horrors and increased dangers, there still are things worse for this country than war.
If we should not, from the point of view of public opinion, gloss over these

potential losses, it does put upon us an increased responsibility to see that if those losses do occur, and despite those losses, in a time of emergency the essentials of our economic life shall still be carried on, and we must lay plans before the emergency arises in order that that will be possible. This Bill deals with only one instalment; it deals only with one part of the losses which might be incurred, and only proposes a solution for that part. It deals with the part which the Government consider is suitable to be dealt with by the method of insurance, and the particular commodities and activities which are dealt with in this Bill are all dealt with on the basis of insurance. They cover ships, cargoes, commodities, a very important part of our national life; but that does not mean that they are the most important. Hon. Members who re call the statement made on behalf of the Government early this year will remember that a large part of that statement was devoted to the far more serious and more important and vital problem of the damage, not to property and goods, but to life and limb. We have to anticipate that in a new emergency it will not only be the soldier, sailor, and airman, and the sailor in the Mercantile Marine, it will not only be the person taking part in our civil defence, who will run this risk; it will be the ordinary citizen, the man and woman in the street. I do not think anybody would claim that that is a problem which could be dealt with by the method of insurance. The right of a man or his family to receive some financial provision in the case of death or in jury cannot be made to depend on the payment of a premium. It must be a responsibility fully accepted by the State, and not dependent upon any financial payment, such as is set out in this Bill, by the person who is to receive this compensation. I say "compensation," but, of course, to talk of compensation —

Mr. Shinwell: May I ask the right hon. Gentleman what he means by responsibility being fully accepted by the State?

Mr. Stanley: As was set out in the proposal by the Chancellor of the Exchequer, that we should not make this dependent upon payment by an individual of a sum, but that the State would compensate or make provision either for the injured person or for the dependants of anyone who was killed.

Mr. Graham White: On the same basis, presumably, as combatants?

Mr. Stanley: That is what my right hon. Friend stated, that it would be approximate to the provision made for those killed or injured in actual war. Though all of us agree, that that important case cannot be dealt with by insurance, there is another form of private property not dealt with in this Bill—forms of fixed property, houses, machinery, etc —which remains to be dealt with. Here too the Government feel and I think everybody agrees, that it cannot be placed upon individuals to suffer alone, that if one man is unlucky enough to suffer from a risk and danger common to all, he ought not to bear the full burden of that loss, but that the community in some sense ought to share it. This point, the point as to whether those cases should be covered by insurance, is the point which is raised in the Amendment on the Paper. It is a point of very great importance, in which I know a number of hon. Friends behind me equally take a great interest, and, therefore, if I may, I will postpone it until I have dealt with the actual provisions in the Bill, and then I will deal with it at some length.
If I may now allude to the Bill itself, the object of it is to cover in various schemes of insurance ships, cargoes in ships, and commodities on land. If hon. Members will turn to the Bill, they will see that Clause I is a Clause under which the Board of Trade will draw its powers for re-insurance against what are called King's enemy risks on ships and cargoes. I am sure I need not explain to hon. Members that in marine insurance you have a general assurance against what are known as war risks, but inside that there is a separate category, known as King's enemy risks, that are risks derived from action by or action taken against the King's enemies. Other war risks, of course, may be incurred in war between two countries with which this country has no concern. The powers under Clause I deal with the re-insurance of these King's enemy risks. Hon. Members will notice that the Clause is of an enabling nature. It does not lay down any particular system of reinsurance; it does not set forth any particular method. What it does is to give the Board of Trade power to enter

into an agreement in order to effect reinsurance against these risks and to lay the agreement before Parliament. But in order that the House in discussing this Bill may be in a position to judge the sort of agreement which the Government would have in their mind to enter into if they obtained the powers under the Bill, I have laid before the House two draft agreements, one dealing with the re-insurance of British ships against King's enemy risks, and the other with the re-insurance of the Marine insurance market in so far as concerns King's enemy risks on cargoes to or from the United Kingdom. Those are agreements which I shall proceed to lay before the House under this Clause, and which, if the two Houses of Parliament raise no objection, will then be brought into force.
If hon. Gentlemen will turn to Cmd. Paper 6058, which is a Command Paper dealing with the reinsurance of ships, they will see there the arrangement set out, but as they are rather lengthy and in rather obscure language it may be convenient if I give a short account of their effect. Hon. Members will appreciate that at present the vast majority of British ships are not insured on the ordinary insurance basis. They are, in fact, insured in war risks insurance associations. It is not so much ordinary insurance as a mutual indemnity. The members of the association are the shipowners. It is not an association carried on as a profit-making concern. Premiums are not, as in ordinary insurance, charged beforehand, and then losses paid out of the premiums collected; but losses are ascertained first and then the sum is made up by calls made upon the members of the association.
The plan under this agreement is that in the pre-emergency period the associations named in the agreement, which I think cover practically all, if not all, the associations undertaking this risk—the associations named will re-insure with the Government 80 per cent. of the value of the ships. The way in which the value of a ship is to be calculated is laid down in the agreement, and I need not therefore trouble the House with details. This re-insurance will cover King's enemy risks, and the association must re-insure the King's enemy risk for all ships 'which are covered by it. The result of that is that each vessel will be covered


without premium in respect of the voyage which is actually current at the time the emergency occurs. Directly thereafter, when the emergency does occur, a rate of premium will be charged by the Government to the association for the re-insurance and the association will not be entitled to charge to its members for insurance against the King's enemy risks a rate of premium higher than that charged by the Government. Since 1935, at the time of the Abyssinian campaign, there has been a scheme for re-insurance of ships ready to be put into operation at any moment when an emergency occurred and both shipowners and this House were informed about that. My predecessor Lord Runciman made an announcement early in 1936. That scheme was less complete and in some respects less favourable to the Government than the present scheme, so in February last, on the expiry of the insurance year, we took the opportunity of substituting this new scheme for the old scheme, to be brought into effect if an emergency occurred again. It is for that reason that in Clause I we have taken power, if the House approves the Bill and subsequently approves this scheme, to antedate it to February of this year.
Let me turn to the other matter dealt with in Clause I; that is the re-insurance of cargoes. In peace time for insurance of cargoes the ordinary basis is different from that to which I have referred in the case of insurance of ships. For the insurance of cargoes there are normally ample facilities in the insurance market on the ordinary premium basis, and until recently premiums for war risks including King's enemy risks, have usually been low and often nominal. But always the market has attached two conditions to the insurance of cargoes against war risks and King's enemy risks. The premium holds good only if the ship sails within seven days of the quotation; and, secondly, insurance contracts—hon. Members will realise that most of these insurances of cargoes are not taken out as insurance of an individual transaction but are done in the course of his business by a man who has a running contract for the whole year to cover the quantity of goods which he expects to ship—these running contracts are subject to 48 hours cancellation, and at the end of 48 hours the rate of premium can be changed in respect of

any goods which have not been already shipped.
Last September we saw very clearly the results upon this market of the existence of those two conditions. In the later days of September this 48 hours notice was given by the market. As a consequence premiums rose very rapidly indeed, and for some voyages rose to very high levels. Within a few days it became almost impossible to make forward contracts. Certain branches of the trade, particularly those dealing with exports, were being brought to a standstill, and certainly if the crisis of last September had lasted another day or two we should have had to, and in fact were in a position to, introduce what admittedly was rather a make-shift scheme in order to deal with a very dangerous situation which would have arisen just at a time when we wanted commodities to be moving as fast as possible and stocks to be at their highest. Just at that moment we would have had this great deterrent to the movement that we required. Since September we have taken steps, in conjunction with the interests concerned, to try to work out a better and more permanent scheme than that which we contemplated originally. Cmd. Paper No. 6002 sets out that scheme. The brief outlines of the scheme are these: In the first place for the purpose of the scheme, the underwriters and the companies who are accustomed to deal with this marine insurance, form a pool, and that pool must re-insure with the Government. It is compulsory and universal. They cannot pick and choose the risks that they would like to insure of the King's enemy portion of the war risks they underwrite. What are covered by this scheme are all cargoes by sea or air to or from the United Kingdom, with certain exceptions such as bunkers, ships' stores, passengers' luggage, and goods in transit.

Mr. Shinwell: They must re-insure? The Bill says "if it is expedient" and "the Board of Trade may."

Mr. Stanley: My point was that they must offer for re-insurance all risks. They cannot pick and choose; they cannot offer to the Government the bad risks and keep the good risks themselves. They can keep outside the scheme if they like but they have to cover good risks and bad. This is done to help them. There


is no single company or any underwriter who would for a moment dream of keeping outside the scheme. The scheme also lays down the maximum premium which the pool can charge. This is 1 per cent. for ordinary cargoes and ½ per cent. for bullion and specie and articles sent by post. There are to that certain exceptions, with which I need not now deal. In return for this re-insurance the pool has to pay to the Government a premium which roughly represents the King's enemy risk part of the premium that they are receiving for the whole of the war risks.
Hon. Members will realise that this is only a pre-emergency scheme. It is designed to make certain that when an emergency comes all goods in transit shall be covered, and therefore there shall not be any deterrent put on the flow of goods. As soon as the emergency actually occurs a Government office will be opened for direct insurance of these cargo risks, and this scheme will be wound up, but goods actually in transit will be covered until the expiry of the insurance. In April of this year, as in September of last year, there were evident signs of the market running wild again. Premiums were being rapidly increased and there was the possibility of exactly the same situation recurring. It was necessary, therefore, in order to prevent that, that the Government should act quickly, and so it was announced, I believe on 13th April in this House, that this scheme would be provisionally put into operation, so that if an emergency should occur, pending legislation by the House shippers would know that in fact there was a scheme which would enable insurance to be obtained, and the market in that knowledge would be able to continue the practice of insuring against these war risks. The result of that announcement was to prevent a general increase in premiums which was on the point of taking place, and in fact it had the result in some cases of a reduction of premiums. So much for Clause I, and the power it gives to the Board of Trade to make agreements and the type of agreement that the Board of Trade propose to make dealing with ships and cargoes.
Clause 2 enables the Board of Trade to undertake direct insurance both for war risks and King's enemy risks for ships, cargoes, and goods in transit, either in peace or war. I know that in some cases

that power will be wanted. I have already told the House that in the case of cargoes it is decided now that when an emergency arises we shall in fact undertake the direct insurance of cargoes. In the case of ships, although we propose at present to let this pre-emergency scheme continue after the emergency, we must not forget that in the last War, the continual removal of ships from the pool because they had been taken over by the Government, forced the Government to pay, not 80 per cent., but 100 per cent. of the insurance; in other words to undertake direct insurance. We certainly must take power to deal with anything of that kind in future.
Clause 3 deals with an important but, I am afraid, a rather difficult point to explain, the insurance of cargoes not actually during the sea voyage but when they are in transit between the ship and the warehouse. Before 1938 it was the universal practice to extend this insurance to goods in this period of transit which were included in the ordinary marine war risks insurance policy, but when about 1937 underwriters decided that they could no longer cover land war risks those facilities were withdrawn. There have been long international discussions since, and they resulted some time last year in what is known as the "water borne" agreement by which all insurance companies, not only those in this country, pledged themselves not to cover goods before loading on an ocean-going vessel. During the past few months there have been strong representations that this gap in the cover has had a damping effect upon the movement of goods into and out of this country. It will be possible under Clause 2, when the emergency has occurred, for the Government to include this risk with the risk during the actual sea voyage, but Clause 3 makes some provision for the transitional period before the Government office is set up and before the Government is able itself to undertake this particular form of insurance. Under Clause 3 cargo carried in ocean-going ships to this country, if discharged within seven days of the outbreak of the emergency, will be held to be covered for what is called the appropriate period. The appropriate period is defined in the Clause as 15 days if the goods are put into port warehouses, and 30 days if into warehouses outside the ports. The other Clauses in Part I are largely machinery


and interpretation Clauses and not, I think, matters on which I need trouble the House at this moment.
I, therefore, turn to Part II, which deals with the insurance of commodities. Provision of this nature is essential on two grounds. It is essential both in peacetime and in war-time. It is essential in peace-time that trade should be kept going, and, above all, it is essential that the maximum stocks of commodities should be accumulated in this country before an emergency occurs. The Government itself is responsible for collecting stocks on its own account, but wants its efforts to be supplemented to the fullest extent by private traders in the ordinary course of business, and wants no deterrent to be placed in the way of those stocks being accumulated. But it is clear that a lack of knowledge of whether, when the emergency comes, those stocks are to be covered would act as a deterrent to their accumulation before the emergency, and therefore from the point of view of pre-emergency conditions a Measure such as this is essential. It is equally essential in war-time that those commodities which are vital for the commerce and the ordinary economic life of the country, if they are destroyed, should be replaced as soon as possible, and that there should not be any breakdown in the economic chain; and we desire under this Part of the Bill to give some security in peacetime that replacement value will be available for these stocks of commodities in time of war. Without going into unnecessary details I will give the general outlines of this scheme for the insurance of commodities. The people entitled to cover are all those who are carrying on business as sellers of goods. It is the insurance of commodities in the way of trade.

Mr. Bellenger: Wholesale and retail?

Mr. Stanley: Yes. The goods to be covered are goods of the description which are sold by that name or the materials from which they are made and which are specified. The only exception to that general thesis is in the case of agricultural commodities. Hon. Members will appreciate that there is a difficulty of interpretation there. You do not have the same continuous change as from the raw cotton to the yarn and to the finished article. The only way to deal with the

problem is by giving the Board of Trade a certain freedom as to what they can or cannot include among insurable agricultural goods, and that is done in Clause II. The peace-time provisions are that there shall be a scheme of registration, and that any person who falls within the scope of the scheme will be able to register in peace-time with a Government agent who will normally be the fire office with whom he does his ordinary fire insurance. He will register in respect of the description of goods which he wants covered and the amount he wants covered, and we have set out in the Schedule the registration fees which he will have to pay. If he has registered and paid the fees then, when the emergency occurs, he will be held to be covered for the first three months of the emergency; and, on the opposite side of the balance-sheet, he will be held to be liable for three months' premiums at the rate which is then declared.

Mr. A. V. Alexander: Will the registration fee be part of the premium?

Mr. Stanley: No, that charge will be to meet the cost of the registration. It will be well worth the while of the trader to register. A person who is not registered in a pre-emergency period will be entitled when the emergency occurs to apply for insurance to the agents and he will be entitled to receive a policy covering him up to the end of the first three months of the emergency, again at the appropriate premium, but he will only be covered when the policy is issued to him, and hon. Members will realise that if at the outbreak of an emergency a number of people who have not registered apply for policies some delay must occur. That would be the case in the quietest times, and in the sort of conditions which are likely at the outbreak of an emergency there may be fairly considerable delay. Therefore, it is very much to the advantage of anyone who comes within the scheme to register before the emergency occurs, because then he will be certain that there will be no gap between the occurrence of the emergency and the time at which he is covered for insurance.

Mr. Messer: It will be automatic?

Mr. Stanley: If he has registered in peace-time he is automatically covered as soon as the emergency arises. These


schemes of registration and insurance will be voluntary in peace-time, but we have taken powers in the Bill to make insurance compulsory in time of war. After the emergency the insurance scheme will be run through the ordinary fire offices, acting as agents of the Government. There are obvious advantages in making use of the large and experienced staffs which will be placed at the service of the Government. We have to remember that the insurance companies will be carrying on their ordinary business of fire insurance—that is to say, against risk of fire not caused by enemy action—and to attempt to split up the staffs and take half into the Government service would create chaotic conditions.

Sir Percy Harris: Does this include Lloyd's?

Mr. Stanley: Yes, I ought to have said that Lloyd's are included. The insurance business will be run on Government account and the companies will be remunerated for their services. Their remuneration will not be upon a profit basis. The companies are making it clear that they do not desire that there should be any element of profit in the remuneration, and we are now considering a formula which will cover their out-of-pocket expenses. I need only add that it will be necessary in time of war for the Government to establish a monopoly of this type of insurance. It will be necessary, first of all, to prevent a private company, by taking the good risks and leaving the bad risks, undercutting us in rates; and, secondly, I think it will be necessary to protect the public, because we do not want companies pretending that they are in a position to offer full and sure cover against these risks only to find that, perhaps, the damage caused is far beyond their resources and their unfortunate clients are left with no resources. This type of insurance, when the emergency arises, will only be done by the Government.

Mr. Shinwell: May I ask why the Government propose to make this compulsory in war-time?

Mr. Stanley: I was going to deal with that and the hon. Member is quite right to raise the point. After I had dealt with the general outline there were two or three

important points which I intended to explain separately, and one of them is, Why compulsion? In the original statement made by the Chancellor of the Exchequer on behalf of the Government it was stated that this insurance would be compulsory in war-time and in the scheme as it now appears it is left voluntary, although power to make it compulsory after the emergency, if we so desire, is included in the Bill. The reason for that is that on reconsideration we did see certain difficulties in making the scheme for war-time compulsory now. If you make a scheme of this kind compulsory, if you say everybody has to insure at the premium which you lay down, it really ceases to be insurance as we know it and becomes compensation financed by a measure of taxation. It is based on premiums, of course, but on premiums settled by the Government and made compulsory, and it therefore is really compensation and taxation rather than insurance.

Mr. David Adams: Is there any taxation? There is no call on the Exchequer.

Mr. Stanley: It is taxation of the individual. You lay down that everybody concerned must contribute so much to this central fund.

Mr. Lees-Smith: A poll tax.

Mr. Stanley: It is a poll tax on the owners of these particular goods. It is quite possible that, whatever we may lay down now in peacetime, in wartime we shall have to make this scheme compulsory because we shall want to make it universal. In the first place, we have to remember that we may then have to consider the interests of the Exchequer and whether it is possible for the Exchequer to finance this scheme unless premiums are collected from all coming within the scope of the scheme. Secondly we have to consider whether it would not be necessary in order to avoid inequalities between traders. Certain traders who were in dangerous areas would feel themselves forced to insure and would incur these premiums, while those in safer places would feel that they need not insure and they would get an advantage thereby.
Thirdly, we may have to consider compulsory and universal insurance, because, if, as a result of selective insurance only people in the most dangerous areas


insured and paid the premiums, considerable price differences might emerge as between one area and another, goods becoming more expensive in the dangerous areas than in the others. Therefore it is clear that circumstances might arise in wartime in which this scheme would have to be compulsory. The great advantage of making it compulsory then and not now is that you would do so in the full knowledge of the facts at the time and full knowledge of the rate of premium which it would be necessary then to charge, and that when you imposed this obligation upon everybody—a poll tax as the right hon. Gentleman has just called it—it would be done by the House of Commons and known of by the country in terms of what it meant in the actual payment of premiums by the individual. That is why we have altered the original scheme which was to make it compulsory ab initio and now propose to take powers to make it compulsory only in wartime.
There is a second variation from the original scheme as it was set out in the Government statement, which was that insurance would be limited to goods which were essential to the life of the community including the maintenance of the export trade. On close examination of the various types of goods we found it very difficult to suggest definite exclusions from this ability to register in peacetime. It is often easy enough to say that such and such a thing is obviously a luxury and the State need not worry about it and should not bother to cover it, but when you examine these commodities a certain number of considerations arise to which you have to give considerable weight. In the first place, there is the question of the export trade. The maintenance of the export trade is of great importance to us. From the point of view of getting foreign exchange it does not matter whether what you have exported, for which you receive your foreign exchange, is a luxury or a necessity. If other countries are willing to pay for that luxury, we are not going to refuse it upon that ground. It is clear that even a luxury article would have to be included in the ambit of this scheme, if it was intended for export.
The practical difficulties of having in, the scheme an article when it is meant

for export and out of the scheme when it is not, are apparent to all. If you exclude from registration a number of goods which are not essential in wartime but which do provide very valuable employment in time of peace, and if you tell people: "When war comes you need not expect any cover," you have exactly that deterrent effect upon that particular commodity and that employment the fear of which on a wide scale was the reason for introducing this scheme. You may in that trade cause considerable displacement and unemployment in time of peace.
We must not forget that some of the most important items which we might immediately class as luxuries play a considerable part in our trade with friendly countries and that, therefore, to take what might be regarded as discriminatory action of this kind might have a bad effect upon the economy of that country with which we are trading and a bad effect upon our commercial relations. So we have made this Bill in the first instance of general application to all goods of the kind, but we have kept the power to declare certain classes of goods to be non-insurable in the light of any examination of those commodities. Some use will be found for that power, but I say at once that any list which we are likely to publish is not likely to be a very long one.
The third general point to which hon. Members may draw attention and ask for reasons is, Why did the Government, in the insurance of commodities, decide not to ask for premiums in time of peace? There is here a quite obvious dilemma before anyone can propose; a scheme of this kind. No one can be so optimistic as to count for certain upon a long period of years between now and the emergency against which we may be insuring, during which a fund can be built up with the payment of small premiums so that when the emergency comes it may be of substantial value in meeting any claims. If we wished to build up, within the limited time which one may consider likely before the emergency occurs, a really substantial pool, the premiums that we should have to charge in peace time would be a considerable amount. To charge a premium in peace-time in the particular manner and on the particular goods, as you would have to do under this scheme,


would be a tax on turnover; it would be a tax on trade, would discourage exports and would be the greatest deterrent to the building up of stocks of those commodities in this country. Considering on the one hand the advantage of an accumulated fund in peace-time which would insure against losses if an emergency came, and on the other the disadvantage of imposing a substantial premium in peace-time and the effect that it might have on general trade, I came to the conclusion that the financial advantage, if the emergency came, was clearly outweighed by the disadvantage which would be incurred in the pre-emergency period.
Part III of the Bill deals with finance. Clause 16 sets up two funds. One is the fund which arises under Part I of the Bill and the other is a fund to deal with commodities. All sums are paid into the respective funds and all liabilities are paid out of the respective funds. The deficit, if any, is paid by the Exchequer and the surplus, if any, in either fund goes to the reduction of debt. As at present provided, Northern Ireland is excluded. It depends upon Northern Ireland, as it is a subject within her province, whether she will come in. If she decides to come into the commodity scheme it will be possible to amend the Bill in order to include her.
I must apologise for having detained the House so long with an explanation of a rather complicated Measure which the House is entitled to have explained. I feel that, having detained it for so long with the contents of the Bill, hon. Members on both sides of the House will expect me to deal at considerable length with the subject in which hon. Members will probably take more interest, the subject not of what is in the Bill but what is not in the Bill. That is the point which is raised in the Amendment in the name of right hon. Gentlemen opposite. I note that their attitude is that they find nothing to criticise in the Bill but merely regret that it has not been extended to cover other phases of national activity. The other phases of national activity to which they refer and which are not covered in the scheme of the Bill include the phases of fixed property, buildings, machinery, furniture and equipment. The question which many of us have been asking and are asking now is, Is it practicable to cover this type of

property, on similar lines to those in the Bill, by an indemnity for the Government to pay in full all losses as and when they occur, in return for premiums charged to the owners of the property?
There has recently been mooted another proposal. I think there is one limited scheme based upon it already in operation and that my hon. Friend the Member for The Wrekin (Colonel Baldwin-Webb) has been active in putting forward that proposal. There is a proposal somewhat different, which I have been turning over. It differs from the full insurance scheme. The proposal is that some scheme might be devised for collecting premiums for the purpose of producing a compensation fund that would be drawn upon to the extent to which it was available. This scheme is not open to some of the objections which are made against the full insurance scheme. I will say something on this scheme in a moment, as I have some suggestion to make upon it.
Would it be practicable to deal with this kind of fixed property on exactly the same lines as we have dealt with ships, cargoes, and commodities in the Bill? When you consider whether it is practicable to do that or not it must be against a background which will be common to all of us, whatever view we take of the problem. Everybody, whether they think it is desirable or practicable to insure this fixed property or not, will agree that any scheme put forward now must be one which we honestly believe can be carried out. It would be dangerous as well as dishonest to insure people and to tell them that, in return for certain premiums, they would get certain payments, unless we were reasonably sure that they would get those payments. That is the kind of background against which we must examine those two proposals, the insurance proposal in the Bill and the proposal that the same kind of insurance can be extended to this fixed property. Can we honestly say that the promise that we are making in the Bill, which is: "In return for these premiums you will get payment in full" can be carried out? I believe it can and it is because of that that I have included them in the Bill.

Mr. Benjamin Smith: Out of the premiums paid?

Mr. Stanley: It is a purely practical question. We all want to give the maxi-


mum cover of insurance to everybody. First of all, in regard to ships and cargo, we had experience during the last War. We know that out of this type of insurance the Government made a considerable profit in the last War. We all realise that in another emergency circumstances may be very different, and may be much more difficult; but there is no reason to suppose, as far as this type of insurance is concerned, that it will be impossible to adjust the premium with some exactitude to the losses which are likely to be incurred.
Part II deals with the compensation of commodities. Here we are on new ground and the sums involved are very much greater than those involved in the ships and cargoes scheme. It is, however, confined to goods which are held by people in business. The goods insured are turned over rapidly in the ordinary course of trade, with the result that substantial premiums can be charged and can be absorbed in the prices at which the commodities are transferred, and it is reasonably certain that a workable scheme can be devised under which—and this is the hon. Gentleman's point—the residual liability of the Government, if any, will be of manageable proportions.
When we turn to fixed property, there are several new considerations. In the first place, the field to be covered is immeasurably greater. Obviously it is quite impossible to give accurate figures, but I have some estimates which I think will at any rate give the House a fair picture of the difference between the two. Under Part I of the Bill, the capital value of the ships to be insured is, we know, about £250,000,000. By a process of calculation we can put the cargoes afloat at any one moment at something near £65,000,000, and the goods to be insured in transit between ship and warehouse at about the same amount. That means a total insured at any one time under Part I of the Bill of £380,000,000. Under Part II, the best estimate I can give of the value of the commodities based on the last Census of Production with certain modifications, is something in the neighbourhood of £2,000,000,000, and so you have, for all the commodities, ships, cargoes and goods covered in the Bill, a total of something like £2,380,000,000. As against that, the value of buildings

alone is estimated to be about £10,000,000,000, to which has to be added an indeterminate figure representing fixed properties like machinery, furniture and so on, for which there are no reliable figures, but which probably cannot be very much less than the figure for the commodities themselves, and so you have something in the neighbourhood of £12,000,000,000 to be insured, against a total in the Bill of £2,380,000,000.

Mr. Benjamin Smith: But the number who insure is relatively larger.

Mr. Stanley: The hon. Member will realise that, the bigger the field you cover, the bigger becomes the ultimate field of Government liability—the residual liability which the Government might have to meet. Obviously, therefore, it is not only the case that the figure will be very much bigger, but clearly the risk to be covered on this fixed property is no better —I will not put it higher than that—than the risk you cover in the case of commodities and cargoes. In fact, I should say that probably a greater proportion of the total of house property value is concentrated in certain areas than is the case with commodities, and certainly, in the case of some commodities which we shall cover, house property is a type of property much more vulnerable to damage by air raid than certain commodities which will readily occur to hon. Members.
When you get to the question of the premium, can you compensate for this bigger value and this bigger risk by being able to charge a bigger rate of premium than you can in the cases covered under the Bill? I should have said exactly the opposite. Under the Bill, the rate of premium to be charged will be widely distributed in the case of commodities, and therefore will be less burdensome on each individual. But the individual householder cannot distribute the burden of his premium at all; he has to bear it himself —nobody else can; and the landlord can only distribute the burden in the form of an increase of rent to his particular tenant. I should have said that whatever premium is charged is going to be more burdensome in the case of the property owner than in the case of the seller of goods or the ship-owner or the exporter who comes under Part I, and, therefore, the rate of premium to be charged certainly cannot be lower than the rate likely to be charged


under the Bill, and would probably have to be higher. I have heard many figures quoted as to the rate of premium and the amount of the pool which might in certain circumstances be created under a scheme of this kind. Against that you have to set the estimate of any loss on property of this character which might be incurred in time of war.
It is obviously quite impossible for me, and the House would not expect me, to give in public estimates which have been made by responsible people of the damage which might be caused to property of this nature by enemy action in time of war. I can only say that no rate of premium and no pool which I have heard mentioned by any who have discussed with me the possibilities of a scheme of this kind approximates to the loss which it is estimated might in certain circumstances be suffered on this class of property in this country in time of emergency, and it is quite clear that, if these circumstances occurred, and if these losses in fact were suffered, great and indeterminate obligations might be laid upon the State—obligations so great that no Government could possibly meet them in full at the time except at the expense of expenditure vitally necessary to the conduct of the war. If that happened, any Government, whatever its contractual obligations, would have to put the vital war expenditure first, and would have to do what is proposed under the Government scheme, that is to say, postpone to the end of the war the payment of these losses, when they would be able to see what the finances of the country were and how far in fact they could make those losses good. If that is a real possibility, and I believe it is a real possibility, no one can say that a Government could now honestly support a scheme which promises to property owners, in return for payment which they make, full compensation for damage as and when it occurs. For that reason the Government, after exhaustive examination, feel unable to introduce now an insurance scheme under which premiums are collected from owners and the Government undertake to pay in full for any subsequent damage whatever may be its extent.
Of course, this does not mean that, because we reject this complete insurance on lines similar to those laid down in the Bill for other commodities, we adopt a non possumus attitude towards owners

of fixed property who may suffer losses in an emergency. On the contrary, the announcement to which I have referred on several occasions lays down three propositions which the Government have already accepted. The first is the general principle to which I have referred, that loss or injury ought not to be treated merely as the concern of those who directly suffer it, but must be regarded as falling upon the community as a whole, and, consequently, constituting a proper subject for compensation—in other words, that it ought not to be left to lie where it happens to fall. In the second place, it has always been recognised, and it was expressly stated in the announcement, that emergency reconstruction of essential property, including, where necessary, housing accommodation, would have to be undertaken with Government assistance as soon as possible after the destruction of such property occurred. It is quite impossible to contemplate the immediate reconstruction of everything, but it has always been recognised that necessary repairs of essential property which has been damaged must be undertaken with Government help so far as possible during hostilities. In the third place, a register of damage done to every kind of property must be promptly made when the damage occurs, and it has been announced that this is being arranged for through the Valuation Office of the Inland Revenue Department. At the end of the war, the resources of the State must be made available, on the highest scale compatible with the then circumstances of the country, on the general lines that there would at any rate be a payment in full up to a certain limit of loss, and thereafter if claims could not be met in full, there would be graded assistance.
There remains the suggestion, to which I have already referred, that the provisions which I have set out might be supplemented by a scheme under which contributions would be collected on the one hand and the proceeds would be distributed when loss occurred on the other. There are very great difficulties in such a proposal, but the Government have already come to the conclusion that it is one that ought to be further examined. The Government cannot promise, for the reason which I have already stated, I am afraid at too great length, to provide an unlimited amount


out of public funds for compensation, and the final adjustment must wait for the end of any future conflict; but we should be very willing to see a practical scheme evolved, if it is possible, in the nature of a mutual provision by which property owners would make a contribution to a common fund and from these resources secure that some interim compensation could be provided.
Accordingly my right hon. Friend the Chancellor of the Exchequer has asked the Financial Secretary to the Treasury to convene, on behalf of the Government, a conference of four or five gentlemen of recognised ability and to ask them to examine the practicability of evolving any scheme for mutual protection against risk of war damage to fixed property in private ownership, excluding ships, cargoes and commodities which are already covered by the scheme of the Bill. The Government must maintain the view that no scheme could be acceptable which would promise to provide an unlimited amount out of public funds for compensation, and the object of the further inquiry is to examine any suggestions that may be made consistently with this essential condition. But if a practical scheme could be evolved, it would not necessarily be rejected by the Government merely because it involved some Government contribution of a reasonable and ascertainable amount. Steps are being taken to constitute and convene the conference at once, and the conference will be asked to advise whether participation in any scheme which they think it practicable to recommend should be compulsory on all property owners, or whether it should be voluntary. The conference will have power to call into consultation such persons as they may think are able to assist them in their deliberations. The day-by-day proceedings of the conference will have to be confidential, and, indeed, some of the matters with which the members of the conference will have to deal are necessarily secret; but, when the time comes, the Government will be glad to consider how far their conclusions can be published. I hope that it will be possible very shortly to announce the names of those who are being asked to assist in this matter.
I think that that plainly sets out the attitude of the Government. We are prepared, under our existing scheme, for eventual compensation at the end of the war. We cannot accept the principle of full insurance, which means taking on a large liability of which we have no knowledge and which in some circumstances no government might be able to meet. But we are perfectly prepared for the consideration of a scheme for some form of mutual insurance which may provide at any rate some interim compensation for those whose premises are damaged in war, and would be supplemented through the more general scheme of compensation which the Government have already announced. I must apologise to the House for having detained it so long, and I hope that with these explanations, both, I am afraid, equally long, of what is in the Bill and of what is not in the Bill, the House will be prepared to give a Second Reading to what I believe is a useful measure of preparation in case of an emergency.

5.0 p.m.

Mr. Shinwell: I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof:
 realising the unsettling effect upon trade and industry as a whole caused by the possible imminence of war, this House regrets that the proposals of His Majesty's Government for a War Risks Insurance Scheme should be limited to ships, cargoes and certain commodities, instead of covering every phase of national activity.
The right hon. Gentleman has explained this complicated Measure in his usual lucid fashion, and on that score at least he deserves the commendation of hon. Members. At the same time, I am bound to confess that he has made out, as I see it, an excellent case for instituting a comprehensive insurance scheme. He has given us a picturesque description of what may happen in the next war, if it ever comes. He told us that the losses sustained would be very heavy. If we accept that view—and it may well prove to be a correct view—clearly no insurance scheme, however cleverly devised, can possibly be self-supporting. Moreover, it seems to me that the right hon. Gentleman has completely destroyed the assurance which the Chancellor of the Exchequer gave on 31st January, and which he himself has now re-stated.
What is the use of making promises to property owners, householders and the like who are without the advantages of a mutual insurance scheme if the losses likely to be sustained are so heavy as to make it impossible for the State to meet more than a portion of the liability? It is in order to remove the apprehensions which, quite properly, exist in the minds of property owners—hundreds of thousands of owner-occupiers—that we intend to persist in our Amendment.
The first question that I must put to the right hon. Gentleman is, On what ground is it proposed to indulge in this discrimination? Ships, cargoes and goods are to be fully compensated—how he arrived at that conclusion is beyond me; nevertheless I accept what he said— partly out of premiums but, clearly, in large measure out of State grants, in order to meet losses sustained on mutual insurance schemes. On the other hand, property, houses and all those important elements in our economic life outside the scope of the Bill are only to be compensated at the end of the war, and only to the extent of the financial powers which may reside in the Government. That appears to be an unfair discrimination.
In the latter part of his speech the right hon. Gentleman, in arguing against a comprehensive insurance scheme, urged that it would be invidious in time of peace to impose additional burdens on property owners. He spoke of a tax, which represented the premiums that might be asked for. He said it might prove a deterrent to building up stocks. Presumably he meant that property owners might go out of business rather than meet the premiums called for under a mutual insurance scheme. But surely the right hon. Gentleman will agree that premiums payable in time of war for ships, cargoes and goods are as much a tax imposed on these essential commodities as would be a premium imposed on other forms of property either in times of peace or of war. A premium, after all, is always a tax. It is a burden imposed on the owner of goods, ships or property as the case may be, but it is, so to speak, a self-imposed tax willingly accepted as a protection against eventualities which are likely to arise. If the Government took their courage in both hands and came out boldly with a proposal for a comprehen-

sive insurance scheme and asked for premiums now, not waiting until the emergency arose, there would be an overwhelming response from all sections of the community.

Mr. Stanley: The hon. Gentleman misunderstood my argument. I said that no rate of premium that I had heard mentioned as one which householders could bear was commensurate with the possible scale of damage.

Mr. Shinwell: The right hon. Gentleman tried to assess the amount of damage that would arise. Clearly that is quite impossible. Any attempt at assessing it is no more than a guess. But, in any event, there is no reason why the Government, even if it established a comprehensive insurance scheme, should promise to pay in full, irrespective of the financial position that might arise during the war or at the close of the war. In fact that is going to be the position of the scheme that is embodied in this Measure. Is the right hon. Gentleman in a position to say now, without any conception of the losses likely to be sustained—loss of ships, loss of cargoes, loss of goods—that every claim that can be established can be fully met either out of premiums outside the Bill or out of financial grants which the Government may be called upon to make? It appears to me that at some stage during the war, if losses were exceptionally heavy, the Government would be compelled to impose something in the nature of a limitation of liability. I agree that that is very likely to happen. A limitation of liability in respect of all claims that might be presented would be a perfectly feasible proposal to make. If there is one thing which would ensure confidence among property owners, householders and the like at this time, irrespective of whether their full claims were rightly to be met or not, it is the knowledge that, by payment of a small premium, at least some part of their claim was going to be met and they would not be called upon to wait until the end of the war when, in some vague indeterminate fashion, the claims would be assessed. It seems to me that the right hon. Gentleman, instead of destroying the case for a comprehensive insurance scheme, has strengthened it considerably.
He said he observed that in our Amendment there was no criticism of the


Measure. He is wrong. There is considerable criticism of the Measure as it stands. There is a need for a Measure of this kind. We are not arguing against the principle. That some form of insurance should be instituted for goods, property, ships, cargoes and the like, we agree. The wonder is that the Government have refrained from embarking on this proposal until this somewhat late stage. The Chancellor made a promise on 31st January. It has taken practically six months to have this Bill presented to us. If the Government envisage the possibility of hostilities at an early stage — I do not know what is in their minds— this Measure should have come before us much earlier. I have very carefully read the White Papers which have been presented and I find that the essential purpose of the Bill is to ensure that shipping and commerce should not be interrupted in wartime or during any emergency, but that the essential economic needs of the State should be carried on, and it appears to be urged that unless additional cover is found— and this Bill provides it— shipowners might lay up their ships in a war. That, surely, is an extraordinary assertion to make. Are we to assume that unless shipowners are offered some material inducement they are not prepared to carry on, and that this equally applies to owners of cargoes and goods? If the right hon. Gentleman differs from that view I shall be glad to be corrected. But I understand that that is the purpose, and, indeed, words to this effect appear in the White Paper. The right hon. Gentleman agrees, therefore, it is clear that some inducement must be found to ensure the carrying on of these departments of commerce.
No inducement is offered to any other section of the community. As far as I can gather, no special inducement is held out to air-raid protection workers, no special inducement is offered to militiamen, to the men in the Services or to the civilian population, who, in the event of war, would suffer equally with the men in the Services. There is no special inducement for householders or property owners, or those to whom I have referred, beyond an appeal based on national patriotism for national service, in my judgment a quite proper appeal and one which will be readily met.
Already there has been an effective response. But for shipowners, owners of cargoes and goods and, by no means least, the fire insurance companies, Lloyd's, and the underwriters who are ordinarily disposed to accept risks, but in time of emergency pass the buck to the Government— for these there must be a special inducement. I am very much concerned that such a special inducement should require to be held out to these persons. If it be found necessary to offer such an inducement, why not have a comprehensive scheme, so that all forms of property are assured of some measure of protection — I will put it no higher than that— instead of being fobbed off by the Chancellor's somewhat indeterminate assurances and by a repetition of the Government's familiar technique of the appointment of a committee of inquiry? Let us suppose that shipowners did lay up their ships— that is the worst that can happen— because premiums were prohibitive. It is the prohibitive premiums with which the right hon. Gentlemen proposes to deal.

Mr. Stanley: The hon. Gentleman will realise that we do not deal with premiums. It is a mutual insurance.

Mr. Shinwell: It is true that this is a complicated subject, and I do not pretend to have the knowledge of marine insurance matters that is possessed by the right hon. Gentleman, who is engaged in the business. But I know that if I were a shipowner and wished to cover a particular vessel I would go to my insurance broker, who, no doubt, would arrange it with a firm of underwriters. That, no doubt, is what happens outside the operations of the mutual indemnity associations. The right hon. Gentleman is surely aware that we are dealing with the possibility of premiums rising, just as in the last War, to such a prohibitive level as to make it impossible for the owners of cargoes to obtain cover. That is the purpose of re-insurance as I understand it.

Mr. Marcus Samuel: Could not the Government requisition ships?

Mr. Shinwell: I am much obliged to the hon. Member. He took the words right out of my mouth. In such a position the Government would be bound to requisition ships if they were required for national needs. I want to represent the


case as fairly as I can. This is no highly controversial matter, which separates parties. We are all concerned with doing what is best for the country as a whole. I agree that in such a contingency, if the Government requisitioned ships required for national needs, the full risk would have to be borne by them; but, on the other hand, the Government would get the profits. What they lost on the swings they would gain on the roundabouts— and in the last War the roundabouts were more profitable than the swings. I am not unduly apprehensive about the possibility of shipowners laying up their ships. There is a difficulty, as I see it; but I refer to it with a certain amount of reserve, as it may be that my assumption is wrong. If other forms of property, not within the scope of the Bill, are not protected by some insurance scheme, it might induce owners of property to sell as rapidly as the market permitted, and thus depreciate the value of the property. If I were a property owner, and knew that I could not obtain cover in the market— either the usual cover or re-insurance cover as proposed in the Bill—but that commodities could obtain all the cover necessary, I might be disposed to sell property and invest in commodities.

Sir Patrick Hannon: What kind of property has the hon. Member in mind?

Mr. Shinwell: I am thinking of houses, for example. [Interruption.] Somebody says, "You cannot sell them." You can always sell an article, at a price. I am satisfied that some property could be sold. There would be a disposition to sell property because in respect of commodities there would be same measure of protection which would not be afforded to property. I think we are entitled to an answer on this. How far will the absence of cover for property impede building operations? I am told that there is some cessation of building operations in the country at the present time— that there is very little building going on. Whether that is due to difficulty of obtaining materials, or to materials having risen in price, or, as I believe is partly the case, to apprehensions regarding the future, whatever the cause, I believe there is some cessation of operations. I imagine that if investors and builders and property owners were covered, as ships and cargoes and goods are, by this form of Govern-

ment reinsurance, they might be disposed to engage once more in building operations.
As the right hon. Gentleman has suggested that we have no criticisms to make on the Bill, I might point to one or two anomalies. Although vessels, generally speaking, are to come within the scope of this Measure, certain vessels are to be left out. Under Clause 2 the scheme
does not include any vessel into which the goods are discharged at any port or place in that country for the purpose of being landed at that port or place, or from which the goods are discharged for the purpose of being carried by sea or by air from that country, as the case may be.
That, of course, may apply in certain cases to goods in other countries, but it may also apply to goods in this country. What we are dealing with here is the trans-shipment of goods over the side from vessels— which often takes place in the Port of London— into barges, lighters, or, sometimes, small coasters. It is a remarkable fact that while the ship from which the trans-shipment occurs is to be protected and the goods are to be protected, the lighters and barges into which the goods are to be trans-shipped are not. [Interruption] The right hon. Gentle man refers to Part II, but there is nothing in Part II which removes the anomaly to which I have just referred. These vessels are not protected beyond the ordinary cover which will be obtained. It seems to be another anomaly that while goods in transit between ship and ware house come within the scheme, the trucks and lorries into which the goods are trans ported do not come within the scheme, nor does the warehouse itself. The ship is protected, the goods are equally protected; they are put over the side into barges, and the barges are not protected. The goods are protected all the way to the warehouse, and still protected when they are in the warehouse, and the ware house itself is not protected. I will leave that matter to the right hon. Gentleman to explain. The position is absurd. It was made quite clear by the statement of the right hon. Gentleman that the State is not to compete with insurance companies. In the case of Part II, where goods are to be covered fire insurance companies are to undertake the business. The State will not. It is the fire insurance companies which conduct the business, receive the premiums

Mr. Stanley: As agents of the Government.

Mr. Shinwell: As the agents of the Government. But the State does not compete with the companies. In the case of the mutual indemnity associations, the position is somewhat more complicated. It is true, as the right hon. Gentleman said, that where there is a mutual indemnity association you put into the pool and you are paid out of the pool. But where there is an ordinary cover for a vessel, through a marine insurance broker and then through an underwriter, again there is no competition between the State and the particular organisation required for the purposes of insurance. Is it not likely that when premiums become prohibitive because the risks to be undertaken are too great, the underwriters will not accept the business; that they will accept it only when the risks are less excessive? In other words, the risky business will be re-insured but when the business is less risky there will be no reinsurance. The Government, by reinsuring, are in the position of being underwriters. How does an underwriter conduct his business? I always understood that it was by balancing gains with losses, and that, as far as possible, he adjusts matters so that his losses shall not be excessive. He does not want to have losses at all, and, so far as I know, it is very seldom that a firm of underwriters goes out of business because of financial difficulties. I know of no case of an underwriter going into the bankruptcy court. The business is a very profitable one. Underwriters adjust the averages very nicely and balance gains with losses, but the business is very profitable.
What is going to happen in this case? Are the Government to accept all the risks? It is well known that in times of war there will be certain shipping routes more risky than others, and I will give one which, though perhaps not a very good illustration, will support my argument. The River Plate trade may be less risky in time of war than the North Atlantic trade. It will be noted that the Government cannot compel shipowners to re-insure through Government auspices. The right hon. Gentleman accepts that contention, does he not? So far as vessels are concerned, there is no

compulsion to be exercised on shipowners to re-insure. They may take all the cover from a firm of underwriters. If a particular trade is less risky than another, there is no reason why there should be any re-insurance through the Government at all. That is to say that on the less risky trade the underwriters will accept the business, but on the more risky trade the underwriters will re-insure with the Government. That is most unfair, and, from the standpoint of the Government, a serious business. There is no reason at all why the Government should accept the risky business and leave all the profitable business in the hands of underwriters.
I pass on to the question of what would happen in war time. It is certain that the Government would requisition many vessels. That was done in the last War, and it will certainly be done in the next war. If the Government requisition vessels on their own volition they will accept full liability for insurance. At least I assume that they will. Or are we to understand that, if the Government requisition vessels, manage them and earn profits on them, they will leave the insurance in the hands of private firms? We ought to have some information on that point.
I come to what I think the Government ought to do. They ought to establish an insurance scheme covering all forms of property. There are several methods open to them. One is to adopt the comprehensive scheme to which the right hon. Gentleman referred, but which he regarded as too risky for the Government to undertake. There is another scheme that could be operated. The Government might set up a mutual insurance company, availing themselves of the services of the private insurance companies and accepting 80 per cent. or three-quarters of the liability in all cases of property, goods, cargoes and ships, and also including houses. The right hon. Gentleman objects to that because he says that it is too vast an undertaking. The Government would collect a vast sum of money in premiums. The right hon. Gentleman seems to suggest that the rate of premiums would be too high and become prohibitive, but that need not be the case. The present premiums of fire insurance are not excessive, and if premiums equal to the present percentages were imposed, they could not be regarded


as a burdensome tax on property owners and houseowners.
But there is no reason why premiums should be as high. There could be lower rates of premium, and, having regard to the fact that so many property owners and houseowners would be only too willing to come within the scope of such a scheme, a very large sum of money would be raised by the Government in the form of premiums. The right hon. Gentleman says that it would be impossible to meet the liability. May I make this suggestion to him? It might be that in the earlier stages of a war claims would be fully met, but that in the later stages, and as the risks became excessive and the losses high, the Government might not be able to meet the claims in full. I suggest that at no time should the claims be met in full. It will be noted that in the Government scheme the claims are not to be met immediately but by instalments within a period of nine months. Even there there might be a limitation of liabilities, and, in fact, there ought to be, for the risks might be too great for the Government to undertake.

Colonel Baldwin-Webb: Is the hon. Member now talking about property or shipping?

Mr. Shinwell: In the case of shipping cargoes and goods the liability is met fully by the Government under the re-insurance scheme by means of instalments over a period of nine months, and I suggest that there should be a limitation of liability because the losses might be too great and the Government expenditure too high. I also suggest that with regard to property, claims could be met in part by the Government issuing to the owners of property certificates which could be made redeemable after the war, and indeed might be made negotiable during the war. That is a feasible proposition, and there is nothing to prevent the Government, as part of a scheme of public works, from replacing property that was destroyed. But that would be accepting a very large measure of liability indeed. There is nothing to prevent the Government from establishing a mutual insurance scheme under Government auspices, the Government accepting full liability, or a partial scheme with which the Government and insurance companies were associated, and in which part of the claims could be met

and the remainder dealt with by the issue of certificates.
I want to say a few words on the subject of commodity insurance which is dealt with in Part II of the Bill, and I wish to know why certain goods are excluded such as, for example, livestock, trees, crops and plants? It is anomalous that, while crops, whether it be wheat, barley, oats or potatoes, are excluded from the scope of the Bill, immediately those crops are transferred to a dealer and warehoused or stored, they are protected under Part II of the Bill. Am I right in that assumption? I believe I am.

Mr. Stanley: It is because of these obvious anomalies that we have put in the particular Clause which exempts them to start with and then makes provision to bring them in particular circumstances.

Mr. Shinwell: I realise that the right hon. Gentleman gives himself a certain measure of freedom. The Board of Trade may or may not bring certain goods within the scope of this part of the Bill. Probably it is a wise provision, but it is the fact that certain commodities are excluded. It is an obvious anomaly that crops which are uncut are excluded, but when they have been cut and transferred from the farmer to the dealer they come within the scope of this Bill. The Government can include them at later stages but the implication is that they are to be excluded.

Mr, Stanley: The hon. Gentleman does not appear to realise that we can equally include the others.

Mr. Shinwell: If the right hon. Gentleman says that livestock, crops, plants and trees may be included in the Bill, what was the reason for specifying their exclusion at this stage?

Mr. Stanley: I explained the position when making my original speech. I said that when you came to agricultural commodities you could not really adopt the definition which it was quite simple to apply to ordinary commodities. The only thing therefore was to take them all out of a Bill like this and give power to put in such as we think should be included.

Mr. Shinwell: I do not think that that removes the objection entirely, but in any


event it means that certain goods are to be covered and other goods are not to be covered, and that in itself is an anomaly. Can a shopkeeper insure his stock? Can a grocer or a draper in a small way of business come within the scope of the scheme.

Mr. Stanley: indicated assent.

Mr. Shinwell: And by the payment of premiums he can be protected during war?

Mr. Stanley: indicated assent.

Mr. Shinwell: Then it appears to me to be more anomalous than ever that a draper can insure his goods but not his shop.
I notice under Clause 15 that ships under construction are regarded as covered, but not the shipyards. Are we to understand that the various kinds of machinery used for building ships, the slipways and all the paraphernalia used in the construction of ships, are not to be covered? They are goods used in manufacturing other articles and are not to be covered, but a ship under construction is to be covered. We require a little information on that matter. I think also that the right hon. Gentleman ought to give a further explanation as to the reason why the Bill does not apply to Northern Ireland. It is a remarkable thing that steel which is sent from this country to Northern Ireland, say, to Harland and Wolff's shipyard—steel that is produced in this country and insured under this scheme—is no longer covered. I do not understand why there should be this exception.

Mr. Stanley: I said in the course of my speech that it depends whether Northern Ireland would wish to be included in the Bill. This is a matter within their competence, and they can be brought in if they so desire.

Mr. Shinwell: Northern Ireland should not be allowed to take exception to a Measure of this kind whenever they please. This is a Measure which affects Great Britain universally, and Northern Ireland should make a contribution to the scheme. They make demands upon Imperial expenditure, and ought to be included. I and the party on these benches do not deny the need for a

Measure such as this. Protection should be afforded by the State when private enterprise breaks down, and apparently that is what is intended, but the principle ought to be applied all round. Whatever the liability and however necessary it might be to limit the liability—it might well be necessary to limit liability—everyone should feel that he had had a square deal. I submit that, if the Government propound a scheme such as I have ventured to put before them, and the kind of scheme which they have referred to a committee of inquiry, it would, if brought into existence, be the means of earning large profits for the Government. In time of national emergency it is much more desirable that these profits should be in the hands of the Government rather than be left in the hands of private insurance companies.

5.45 p.m.

Sir Alan Anderson: We have before us two interesting problems—whether we approve what is in the Bill or whether we disapprove of something not being in it. I will start with a few remarks on what is in the Bill. In general, I think it is not only a good Bill but it is a necessary Bill, and overdue. It has been very urgent for a long time that the movement of goods should be capable of being covered by insurance. A question was raised by the hon. Member opposite about the fairness of covering goods in ships and not other risks. I agree with him in part, but the point about covering the movement of ships and goods is urgently important at the beginning of or just before war. After a war has started if the Government find that there is a hold-up of ships, they can requisition.
Before the last War we lacked any insurance provision of this kind, and it was necessary for the shipowners to visit the Government and place the urgency of the matter before them. I went on a deputation to the Government on the Saturday before the War broke out, to point out that ships are entered in a mutual insurance club and by the rules of those clubs the ship is covered by war risks until she gets into a safe port. Having got into a safe port, she must secure cover before she puts to sea again. The values involved in ships, directly and indirectly, go far beyond the capacity of the individual shipowner and therefore the deputation of shipowners pointed out that


their ships would have to stay in safe ports until some measure of insurance of this kind was arranged. We pointed that out to the Government in 1914, and luckily they had a scheme ready. They brought it out at midnight on the Sunday and the War broke out on the Monday. We do not want to run things as fine as that again. This scheme is intended to meet those points and I believe, subject to a few doubts about wording, it meets them.
I apologise for the fact that many of the things that I am going to raise are more for the Committee stage than general debate on Second Reading. In Clause I, the Board of Trade takes power to enter into agreement for re-insurance. In the ordinary sense, re-insurance is hedging. That is you may think that you have taken too much of one risk and you re-insure part, but that is not the meaning in this Clause. I suggest, however, that the words are not quite clear. Insurance people understand what is meant, because the agreement has been under discussion. A more important point is in Clause 2 (e) where the Board takes power to insure, during the continuance of war, the goods while they are in transit between the ships or aircraft and the premises to which they are consigned. I Believe the meaning of that is to provide continuous cover for goods first in the ship and then in transit until as is arranged in a later part of the Bill they can be covered when they are goods waiting to be sold. That, obviously, should be the intention. There should be complete cover. This is rather a point for the lawyers. Is it correct to say that the goods are consigned to a place? They travel in a ship on charter party and bill of lading, which normally mentions only the port and the person who is to take delivery. Although I am not a lawyer, I doubt whether the intention is quite carried out by these words.
There is also a doubt in Clause 3 (4) with regard to the definition of" port. "Is it quite clear in law what is the extent of a port? The waterway of a port is clearly defined, but I doubt whether these words carry out the Government's intention to cover goods that are in a port warehouse. The cover should be comprehensive.
It appears clear from Clause 11 what is meant by the "description" of goods, but that Clause does not tell us

what are "the goods." Does "goods" mean anything that can be offered to sale? The Gas Light and Coke Company, for example, sell gas and coke, so I suppose those are insurable "goods," also the coal from which the goods are made.
Is electric power "goods" and can the Hydraulic Power Company insure the water under pressure in its mains? Here again, it is important that the cover should be comprehensive.

In Clause 15 it states that
 a ship shall be deemed to be or to have been owned by the constructor thereof, and by no other person, at all times before the completion of the construction of the ship.

The intention to insure the ship is clear enough. The plates that go to make up a ship are insurable "goods," and when they are put into the ship they remain goods until the ship is delivered to the owners. I suggest that the word "delivery" would be more appropriate than "completion." In the normal course when a ship is completed she goes on her trials arid is not handed over until she gets to her final destination. These are all the comments of detail that I desire to make.

The Bill is absolutely essential, so that we may ensure that the flow of commodities to this country is not checked by a crisis or by apprehension, but that everything should as far as possible proceed in a normal way. I hope that will be the result of this Bill. If and when war breaks out, the Government can sit down and make what arrangements they wish by requisition and otherwise, but what is urgently needed now is to take precautions against the disturbance and the checking of supplies in the first stages. That brings me to a large section of risk which is omitted from the Bill, and while I regret that omission I quite understand it; a separate Bill is required for the purpose. The omission of cover for houses and property is a serious deterrent to progress and construction and to business generally in this country during these days of peace. I hope that we shall have many years, many decades of peace for every month of war, but, unfortunately, many of those years will very likely be overshadowed by apprehensions of war, and we do not want our normal, healthy business in peace to be interfered with by apprehensions for which no cover by insurance is available.

In war if we do not have this insurance there will be wholesale bankruptcy and ruin and the material damage will be multiplied by the quite unnecessary dislocation caused by our not having done the very thing which the Chancellor of the Exchequer and the Government have said they intended to do. I fully believe that, as this is a strong and honest National Government, they mean every word that they have said, and that is that they intend to make provision so that the loss caused by the bomb should not be allowed to rest where the bomb falls. The President of the Board of Trade says that he intends to appoint a committee to advise him and to make suggestions how to meet this point. I welcome that statement. It is certainly a very complicated subject and he needs advice from the best people. I hope, however, that he will not restrict them in their inquiry by a limited reference. The reference to them should be to advise him in what way the Government can implement the statement that has been made, that the loss caused by the bomb shall not be allowed to rest where the bomb falls.

It may be that the plan adumbrated by my right hon. Friend will be one approved by the committee, but on the other hand the committee may think quite differently as to the possibilities of an insurance scheme. I do not in the least share my right hon. Friend's apprehension about covering the risk by insurance, simply because the risk is large or because its incidence is unknown. Those, surely, are the very reasons which cause people to insure; they are the reasons for insuring and not the reasons for not insuring. When there is an enormous volume of risk to be taken into account even if you have the whole of the State behind you, you are necessarily careful in the commitments you make. I hope that we shall carry out the pledge that has been announced, which is necessary for the continuance of business. When the committee is appointed it should certainly have the widest possible scope to deal with a very difficult problem, and to make proposals.

5.58 p.m.

Mr. White: I have listened with extreme interest to the speeches made this afternoon, and I am very grateful to the President of the Board of Trade for the

very full explanation he gave of what is undoubtedly a very complicated Measure,which finds expression in many Clauses and Sub-sections, the phraseology of which is not as clear to the layman as it might be. The few observations that I shall make will be made in no spirit of captious criticism. I agreed with the hon. Member for Seaham (Mr. Shinwell) when he said that this is not a party question but that we are here to devise the best possible scheme that will give the greatest measure of security in a possible emergency. That is the problem as I see it. We have in peace time a wonderful machinery in this country for giving insurance in all our activities and in all the transactions into which we enter. If by any chance that machinery were thrown out of action the whole of our economic life and the whole of our domestic life would be thrown out of gear.
The problem we have to consider now is how this cover, which in normal peace times is sufficient, may be so expanded as to cover the risks, as far as we can see them, which we may be called upon to endure in the course of war. The President of the Board of Trade has explained that the present Bill is one of a series of steps which have been taken to give us greater security in time of war; it is the natural complement to the active steps which have been taken by the Board of Trade in connection with the control, distribution and rationing of food. The preparations of the Government in that respect are probably more complete in detail than they are in any other of our defence schemes, but our satisfaction on that matter is somewhat marred by a doubt as to whether the food will be here in full amount to be distributed by the machinery they have set up. I hope that one of the further steps which the Government will contemplate will be some further provision for increasing the storage of the supplies of food and materials which may be necessary. The provisions of Part 2 of the Bill and the task of the Navy and Mercantile Marine would be made much lighter if now we could import every conceivable material which can possibly be needed in time of war.
In the course of last year the Government have expended some 8,250,000 in the importation of materials and reserve


of stocks for war. In the present financial year provision is made in the Budget for an expenditure of 5,000,000, mostly for petroleum and other materials The whole provision amounts to very little more than a two weeks' supply of food for the country. I suggest that another complement to the steps which have been taken as regards distribution and the provisions made in this Bill, should be the step of increasing the supplies of food and raw materials in the country, which would lighten the task to be carried out under this Bill and the task which will fall upon the Navy and the Mercantile Marine.
1 do not know whether I am too innocent in these matters or whether my intelligence is not sufficiently acute, but on first reading the Bill I did not conceive it as a profit-making arrangement at all. It did occur to me that when the pool of insurance provided by normal sources was exhausted the State should then come in and help to extend it. It did not occur to me that the State would be in competition with private enterprise in this matter. I am not interested in any insurance company, but I should have thought that a question of competition was impossible here. If there are two rates the insurance will go to the lowest rate, and in that way no competition in the ordinary sense can possibly arise. I was unable to follow the hon. Member for Seaham in his reading as to these special inducements which would be required by shipowners to continue in business. Perhaps some shipowner will clear up the point. There is no special inducement here. All that the shipowner has is the normal cover which would enable him to replace his ship if it is sunk. He gets reinsurance from the Government, but it is not a special inducement; he is not getting any more than he is entitled to in peace time.

Sir A, Anderson: The special inducement in this case is that the householder does not get insurance.

Mr. White: In that sense he may be getting a special inducement, and I am in sympathy with the desire that insurance shall be extended to cover the householder. The speeches which have been made hitherto have dealt more with what is not in the Bill. I must say that what struck me at once on reading the Bill

was the absence of any provision for the seamen and the people who will work these ships. It is a most conspicuous omission. Here we are providing for the owners of ships but in the whole of the scheme there is no reference to the men who will work the ships, and I think that is a matter which should be carried a stage further than it has been in the Bill. The statement of the Chancellor of the Exchequer in January of this year was to this effect:
 As regards members of the Mercantile Marine, it is proposed that in the event of their death or injury due to war perils at sea, compensation shall be payable on the basis of rates applicable to personnel recruited for service in the Royal Navy during the same hostilities." — [OFFICIAL REPORT, 31st January, 1939; col. 28, Vol. 343.]
That is a perfectly clear statement, but sailors are not within earshot of the House of Commons; they are sailing in all quarters of the world, and many of them will never have heard of that statement. They are entitled to a greater feeling of security, and I would ask that some steps should be taken to enable this statement with regard to their security to be conveyed to the members of the Mercantile Marine. There is a question regarding lighterage to which I should like to refer. It is of greater importance in time of war than in peace-time. Nothing is less likely in time of war than that we shall be able to carry on our ordinary processes for discharging ships, and it may be necessary to have greater recourse to discharging into other vessels. Therefore it seems to me to be a matter for inquiry as to whether there should not be cover in the Bill for that. I confess that on reading the Bill I thought this was to be excluded, but perhaps the cover is to come under Part II of the Bill. I hope that may be the explanation, and that lighterage is to be regarded in the same way as warehouses.

Mr. Shinwell: Warehouses are not included.

Mr. White: I thought the matter was dealt with in Part II of the Bill, but if that is not so I hope it will be cleared up. It seems to me that the drafting of the Bill is not as clear as it should have been. Talking of drafting, may I refer to paragraph (c) of Clause 2; there appears to have been an omission. It says-—
 The insurance by the Board of Trade of cargoes carried in ships.


I think it should read "the insurance by the Board of cargoes carried in British ships."

Mr. Shinwell: The point is that in the previous paragraphs there is a reference to British ships, and in this case the reference is to foreign ships.

Mr. White: I apologise for raising Committee points at this stage. May I refer to the question of ships under construction? I am glad that they are in the Bill; I thought there was some danger that they might be omitted. But the position does require to be cleared up a little more and we should know what the actual position is. The usual practice, I understand, in regard to ships under construction is that as the construction reaches a certain stage payment is made on account by the owner, and ownership is gradually transferred to the owner. The process suggested in the Bill is—
 provided that a ship shall be deemed to be or to have been owned by the constructor thereof and by no other person at all times before the completion of the construction of the ship.
That runs counter, I understand, to the finances of all shipbuilding at the present time. It is impossible to say how far this may go if the Bill becomes an Act.

The Parliamentary Secretary to the Board of Trade (Mr. Cross): Perhaps the hon. Member would like me to explain the position at once. Part II covers persons carrying on business as the seller of goods, and the owner of the ship is not a seller of the ship. It is the constructor who is the seller; and that is why the paragraph has been drafted in this way.

Mr. White: That shows how extremely difficult the drafting is in these matters. When I read this I thought of the instrument of insurance which is issued in the case of what is called a comprehensive policy by many offices, which is generally incomprehensible. I am grateful however, to the hon. Member for his explanation, but I should be glad if he would take steps to make it clearer because I can assure him that there are many persons who are daily concerned with these matters and feel some considerable apprehension as to what exactly it means and whether it is going to alter the whole course of the financial arrange-

ments of shipbuilding. The hon. Member for the City of London (Sir A. Anderson) emphasised the point in Clause 2 in regard to premises, pointing out that the only documents which will be available are the ship's documents and that these do not specify the actual address of the warehouse to which the goods may ultimately find their way. The ship's authorities may have not only no knowledge of the warehouse, but no authority to deal with it. Those are the points to which I wanted to draw attention in the hope that by so doing I might save time in the later discussions.
We have no doubt about the necessity for this Bill. It is complementary to the plans that have been made already for the rationing, distribution and control of food in time of war. There are two further things which the Government have to do before they can be satisfied that the food supplies of this country will be forthcoming in reasonable quantities and at regular times. One is to pass this Bill, which will enable goods to be kept in movement on the high seas and ships to be brought to their port of destination. The other task is, without further delay, to utilise all the tonnage now available in importing goods into this country—preferably those goods which occupy the greatest cargo space— and in bringing greater supplies of food and materials. The Government have said that their policy in that regard is merely to make provision for a brief period after the outbreak of war.' For many reasons, there is grave anxiety on that point, and I hope that the Government, having taken these two steps, will take the third and most essential step, which is to see that the food is actually there, by using the machinery which they have provided already.

6.17 p.m.

Colonel Baldwin-Webb: It is very gratifying to note the great amount of agreement on this Bill in general, and also on the proposal to set up immediately an inquiry into the need for some kind of compensation for the owners of houses and other forms of real property which may be damaged in war. I appreciate the statement made by my right hon. Friend the President of the Board of Trade. That statement, in itself, will give confidence to the country. It is not that we are so much interested in the owners


of property, but we are interested in the necessity of maintaining our economic well-being. I want to make it clear that, due to a lack of confidence, the construction of houses and property generally is being held up, and will in time cause unemployment. It is true that at this moment the building trades are active, as are many of the ancillary trades, but the time will surely come when we shall need private building to replace the public building that is going on at the present time. It is impossible for people to engage in the development or construction of property at this time, owing to a lack of security and a lack of confidence. The hon. Member for Seaham (Mr. Shin-well) referred to the fact that cover could not be obtained against this risk, and he recommended selling. That is just the thing we want to avoid.

Mr. Shinwell: I am sure the hon. and gallant Member does not want to misrepresent me. I did not recommend property owners to dispose of their property. I said that unless they obtained some insurance about cover, they might be disposed to sell.

Colonel Baldwin-Webb: I am glad that the hon. Member has made that clear. I want to draw attention to the need for immediate action and for a quick report. The country is expecting action immediately, and I hope that every possible scheme may be examined. I do not suppose that we shall be told what took place at the recent meeting between a deputation and the Chancellor of the Exchequer, but although schemes may not have been considered then, I gather that there was a discussion, and that it was made quite clear to the Chancellor that there is need for such an inquiry to be instituted immediately. I hope we may have an inquiry, that consideration will be given to every reasonable scheme, and that there will be legislation on the matter at an early date.

6.21 p.m.

Mr. Barnes: I recognise that the President of the Board of Trade is confronted with a very difficult problem in dealing with war insurance. We are endeavouring to legislate for liabilities that cannot possibly be assessed, and whoever may be the Minister responsible for carrying out that task, he will have no happy job. I should like to associate

myself with the statement made by my hon. Friend the Member for Seaham (Mr. Shinwell) that, with regard to the first part of the Bill, we should prefer a method whereby the Government would take over the whole of the shipping of this country on the outbreak of war, and that, as the State would be compelled to meet the losses, it should also have an opportunity of enjoying any profits there might be, or at any rate of ensuring that the safeguarding of the- losses to the shipping industry should not be used for the purpose of exploiting the community.
With regard to the Bill, it is clear that the Government and the President of the Board of Trade, in applying the provisions to shipping and goods only, are assuming that the liability will, be passed on to the consumers of the goods. Therefore, it appears to me that this is one of those vicious factors which start the circle of rising prices in time of war. But whatever may be our views as to the methods that should be adopted to deal with the problem, there is no disagreement on any side of the House that the job must be undertaken. However greatly our ideas as to the methods may differ, we recognise that the flow of goods into this country must be maintained at all costs during a period of war. Our experience from 1914 to 1918 demonstrates that lesson. We are now confronting a problem irrespective of the experience that we had from 1914 to 1918. It is still impossible for the President of the Board of Trade or the Government to assess the possible liabilities even under a scheme of this description. I ask the right hon. Gentleman to check the figures which I am about to give. I understand that he estimates the values under Part I of the Bill as being £380,000,000, and that the values involved in Part II of the Bill amount to £2,000,000,000.

Mr. Stanley: Those are very rough estimates.

Mr. Barnes: I am stating rough estimates. Therefore, the values we are to cover by this Bill amount to £2,380,000,000. While hon. Members on this side will not divide against the Bill, we ought to take this opportunity of making it plain to the Government that we look upon this Measure as being on account. It provides the House with an


opportunity of expressing the overwhelming opinion in the country that, as quickly as possible, the Government should accept the responsibility for covering the whole reasonable field of insurance. When dealing with the second and larger problem, the Minister defended the Government's refusal to accept the larger liability on the grounds that one cannot reasonably ask for a premium sufficient to cover what might be the anticipated liability. I think that applies with equal force to this Bill, the only difference being that here the values involved are necessarily limited and restricted. I venture to suggest that in this field, as in other directions during the past two or three years, we shall discover a psychological development in the country which will compel the Government step by step to expand this policy. If that be reasonably certain, surely it is better for the House and the Government to anticipate that development, and to provide for it as quickly as possible. The Minister, in defending the need for greater caution with regard to insurance in the wider field of property and values, stated that the estimated value of house property amounted to, in round figures, £10,000,000,000. I gather that the estimated value of commercial and manufacturing property, fixed plant and machinery, is in the neighbourhood of a further £12,000,000,000.

Mr. Stanley: I said another £2,000,000,000. I frankly admit that is purely a guess.

Mr. Barnes: I gathered that it was £2,000,000,000 but I felt sure there must be some mistake, for I am confident that the figure must be much larger than that. I should say that the value of commercial property, fixed plant, machinery, commercial premises—

Mr. Stanley: When I said house property, I meant all buildings, whether commercial or private. The amount of £2,000,001,000 was my guess for plant, furniture, equipment, and effects.

Mr. Barnes: It was the term "house property" which was confusing. I take it that buildings represent a figure of £10,000,000,000, and plant and machinery £2,000,000,000, making £12,000,000,000 in all. I wish to submit to the right hon. Gentleman that the

possibility of physical damage and destruction throughout the country even in the worst conceivable contingency should not exceed from 5 per cent, to 10 per cent, of the physical properties in the country. If the State can undertake a liability to the extent of £2,300,000,000, it appears to me that we shall also have to face a liability of the kind I have indicated. Therefore, it would be far better for the House and the Government to face this problem and find the most practicable method. It is no use the right hon. Gentleman meeting a comment of that kind with a derisive smile on his face.

Mr. Stanley: It is not derisive.

Mr. Barnes: I am glad to have that disclaimer, but I have studied the expressions on the right hon. Gentleman's face too long in Committee to be deluded as to his feelings on the matter. The right hon. Gentleman, in stating the attitude of the Government towards this problem, said they accepted the general principle that liability should not rest upon individuals. The clear meaning of that is that the individual owner of property which is destroyed by bombing should not, alone, meet the total loss. There is no use in having any ambiguity in a matter of this kind and when the Minister, on behalf of the Government, makes a statement such as we heard to-day, the public are entitled to accept it as an assurance that the individual owner of property will not be faced with a loss. But then we move to one of those ambiguities which, naturally, cause considerable distress in a community like ours. The right hon. Gentleman went on to state that the Government would confront its liability under this general principle when they had reached the period of reconstruction and that, in the meantime, the Inland Revenue would have the responsibility of making a register or inventory of all damaged property.
The House must face the inequity of those two proposals. If this statement were allowed to pass unchallenged in a Debate of this description, it would mean that we were accepting the principle that direct and immediate insurance liability should be undertaken by the Government for ships and cargoes and for goods in transit, while in this Bill, as has already been pointed out, the ships are insured


but not the crews, and, as my hon. Friend the Member for Seaham (Mr. Shin-well) said, goods in transit are insured but not the land transport and not the warehouses which are to take the goods. If we accept the general indication of the Government's policy under these headings, we leave the general community in a state of complete uncertainty as to how their own property is to be dealt with. I never like to criticise any proposal without offering some alternative suggestion. I recognise the difficulty which is involved, but I assert that we shall be driven by public opinion to meet this liability, and it occurs to me that a comparatively reasonable insurance premium of 1 or 2 or 3 per cent., on the value of the property, might be adopted by the Government as part of an insurance scheme. I recognise that that will not meet the immediate liability, but I do not consider that the scheme is impracticable for that reason. The Government could carry on this scheme and the amount which it would produce could be funded. The Government could accept liability for immediate repayment of damage; the premium, in subsequent years, could fit into any Government reconstruction scheme, and gradually clear off the liability.
I recognise that the attitude of the right hon. Gentleman is to dismiss any proposal of that kind on the ground indicated by him in his opening remarks, that any premium fixed at the present moment could not meet the immediate liability. I would say that in advancing a proposal of this kind I do so entirely on my individual responsibility. I want to make it plain that I am not advancing this proposal in any collective sense, either for any body of Members in this House or for any bodies outside the House. Obviously all the liabilities "which would be involved in a war could not be met out of current revenue and current obligations. But if the Government accept liabilities of this description as for instance in the loan policy by which they are financing armaments, and in pensions and in other things of that kind, they carry over a certain period the meeting of those obligations. They carry over a certain period, the payment of interest on loans and war debt and things of that character. I want to a skin a very direct manner from the Government

why the small householders of this country who have put their savings into the purchase of their houses—who have very often put the whole of hard-earned savings which it has taken them 10 or 15, or 20 years to accumulate, into the purchase of their houses— should meet with no consideration from the Government, merely on the ground that you cannot define an insurance scheme which will meet that liability at the moment when it occurs.
It is all very well for the Government to appoint a committee to go into this question. They have not appointed a committee to go into a particular scheme. The Government have accepted their responsibility and have put before the House of Commons the scheme which we are considering to-night, and I regret that, in regard to the larger possibility of disaster and distress caused by air raids, the Government should be shirking their obligation and pushing it off on to a committee of inquiry. They have all the available information at their disposal. We all know that. Therefore I suggest that in this Debate we should make it perfectly plain that, if we do not oppose this Measure, it is not because of satisfaction with the Government's attitude. They have already delayed too long in dealing with this problem of insurance and there should be an insistent demand from all sides of the House that they should come forward as quickly as possible with a Measure and with methods, which will cover the whole field of insurance liability in this country.

6.39 p.m.

Mr. Denman: I know of no other Minister who is so prolific in Bills which I gladly support as my right hon. Friend the President of the Board of Trade. Whatever office he occupies he always seems to bring forward about half-a-dozen Bills which are worthy of being passed and not least of these, is the Bill which is before us this afternoon. As we all know, insurance is the oil of the commercial mechanism and my right hon. Friend, by this Measure, is seeking to preserve us from the fate of the unwise virgins who, in the moment of need, lacked the necessary oil. I welcome the Bill for the very special reason that I suppose, almost alone among the Members of this House, I recollect the insurance position which existed at the out break of


the last War. My hon. Friend the Member for the City of London (Sir A. Anderson) spoke of what happened on the Saturday preceding the outbreak of the last War. My mind dwells more vividly on the events of the Friday when none of us had really made up our minds that war on the threatened scale was going to happen. A war of that kind was quite beyond our experience and there was something like chaos in the insurance market.
We had to consider varieties of problems which were quite foreign to us. There were questions of ships afloat in all sorts of positions, in the Mediterranean, in the Atlantic and the East, cargoes of cotton on the way to Russia, cargoes of coal on the way to Suez, cargoes of grain from the Black Sea, which had suddenly to be insured against war risks; while the banks were demanding policies before they would finance the shipments then being made. There was a position of something approaching chaos in the insurance market, and the market had to adjust itself to the new conditions with great rapidity. Those were the days before we had learned to count upon the help of the State. I think on this occasion the State is wise in taking precautions in advance, so that the commerce of the country will not be threatened with something like a breakdown should war occur.
Having welcomed the Bill as a wise provision to meet circumstances of that kind, I wish to add my voice to the voices of other hon. Members who have spoken and who have expressed a desire for some effective scheme of insurance for fixed properties. I believe, and many insurance experts believe that such a scheme is possible and practicable. There was a moment when I hoped that a scheme might have been worked out by which the State would undertake what we know as the catastrophe risk, that is to say that the market would insure a large number of separate risks and reinsure with the State at an appropriate premium against the danger of all those risks eventuating at the same moment. I recognise, however, that that might involve a burden which the State could not easily carry. The argument for the need of an inclusive scheme has been put by my hon. and gallant Friend the Member for The Wrekin (Colonel Baldwin-Webb).
He pointed out that under present conditions the difficulty of financing, on reasonable terms, the building of houses or of any structures within what are regarded as dangerous areas was becoming serious. My right hon. Friend the President of the Board of Trade has said that he proposes to set up a committee to examine the possibilities of a mutual insurance scheme. I shall be much interested to see the details of such a scheme. I confess I am rather sceptical. I do not believe that any such scheme can provide adequate funds to give the necessary cover, or that it would be regarded as adequate security. However it is impossible to dogmatise on a point of that kind, before one sees the actual scheme itself.

Mr. E. J. Williams: I have heard several Members during this Debate refer to lack of initiative on the part of building societies and other people in regard to the construction of houses. I have seen no evidence of that in the West country or in South Wales. I would like to hear some evidence of it. I can only say that if people bring industries to South Wales, they will find there any amount of initiative to build the houses.

Mr. Denman: South Wales, I would point out, is not an evacuation area; it is a reception area, and I think many people would probably be prepared to finance building in Wales generally who would not be equally ready to finance building in London. It is London which I have in mind, and it is in regard to London that I have had reports and practical examples given to me. The Government's policy is one in which the Government appear to make the worst of all worlds. They admit that they have at the end of the war to compensate up to a given maximum. That policy means that they are not at the present time giving a sense of security. They are not getting any premiums, and at the end they will have to pay compensation on a scale that will prove at least as costly as a scheme that I want to put forward.
I venture to suggest a perfectly satisfactory scheme of insurance that it is within the ability of the State to carry. The hon. Member who spoke last commented on the figure of £12,000,000,000, which is a very rough estimate, to which we must not hold the President of the


Board of Trade. But assuming that figure, and assuming what, I think, is a very drastic and even excessive figure of loss, that one building in twenty gets destroyed in the course of a year of war, you then get the figure of £600,000,000 compensation per annum during the length of the war. That is a very heavy estimate of probable damage, but it is not a figure that the State would feel incapable of dealing with at the end of the war. The scheme that I suggest is that the State should accept premiums and pay claims in the form of certificates of insurance convertible into cash at the end of the war. These would be negotiable documents and would have a value. They would be for a specific amount, and they would not become cashable until the time when, even on the Government schemes you had got to pay for the damage. Of course, they would give a real measure of security. Moreover, you would get premiums for them. At the end of the war no one can say what would be the value of anything on earth, what would be the value of sterling, for instance, and Government compensation in term: of sterling might far exceed their liability under certificates of insurance. I do not think a premium of 1, 2, or 3 per cent, would be practicable in. time of peace, and the sort of premium that is thinkable is much more like 2s. per cent., which I believe you could collect compulsorily, and that would give you, on your estimated figure of £12,000,000,000, £12,000,000 a year, at least something to begin with. You could not get it started till this autumn.

Mr. Stanley: On my hon. Friend's own showing, it is one-fiftieth of the loss which he anticipates will be payable.

Mr. Denman: Yes, but you might have 50 years in which to build up your fund. Anyhow, there is no reason for not beginning to build it up. You admit that you have to pay whatever the figure may be at the end of the war. Very well then, do begin to get your premiums for it. Make your claims payable by means of certificates that will not become cashable till the end of the war. If at the end of the war there has to be a scaling down, your insurance certificates will not be the only things scaled down.

Mr. Stanley: Under the Government system now you would compensate according to the ascertained loss

Mr. Denman: What I am proposing is that you should give these insurance policies for specific amounts, and when the claim comes the man receives the insurance certificates. He can sell them if he likes, or keep them till redemption.

Mr. Stanley: It being understood that when the end of the war comes, the amount of these certificates may be scaled down.

Mr. Denman: It being understood that the value at the end of the war of any securities one held during the war could not be estimated. I do not see that there need by any necessary scaling down of the certificates, but the post-war position is so problematical and so hypothetical that people would prefer a definite payment of certificates at the time of the claim rather than wait for post-war compensation. The extra merit of it is that during the war people will not want to rebuild in the great mass of cases. They will be willing to take their certificates and await their chance of rebuilding. But if they want to build immediately, they will be able to sell their certificates. Anyhow, it gives them something of immediate value when the loss arises. It gives them something which they will have contracted to obtain, and something which they will know will have a fluctuating, value, just as they know, when they receive a sum in sterling at the end of the war that that sterling might not be able to rebuild a house. I submit that any kind of certificates that you can give in this totally uncertain position will be valuable. You will not be endangering the Government finance in this way. You could have a further safeguard by limiting the amount of your cover for different classes of risk. If a man comes along and wants £5,000 on a house, you can say, "No, your maximum will be £2,000."You can fix your maxima for shops, or dwelling-houses, or factories at anything you like, and in that case you would not undertake to compensate any more at the end of the war. You would have given a person a definite insurance of a definite amount, and that would be the State's liability. I think a scheme of that kind is practicable and workable and would create precisely the security that is so much needed at the present time. I do not propose to discuss the details of the Bill, which would be more suitably dealt with in Committee. I


do in general heartily welcome it and only wish it were further extended in the direction which I have indicated.

6.54 p.m.

Mr. John Wilmot: If what I have to say refers more to what is not in the Bill than to what is in it, it is in no way because I think the Bill and the protection which it gives are unimportant, neither is it because there is any doubt left in our minds, after the very clear and lucid explanation which the Minister gave, as to the general meaning of the provisions of the Bill, though some small doubts still remain which perhaps can be more suit a by dealt with in Committee. The right hon. Gentleman, in laying the Bill before the House, brought forward, with very cogent arguments, various reasons for the insurance of these risks, and he said he had selected this particular department of commerce for special and immediate treatment. I want to put it to him that in dealing with this department of commerce and business, he is no more able to form an accurate estimate of what would be an appropriate premium than he would be in any other department.
It is impossible to foresee the nature and extent of the damage of a major war, and, therefore, the right hon. Gentleman has very wisely omitted to state any premium, but he has made provision for automatic insurance in the case of an emergency. In doing that, he advanced arguments which are just as powerfully applied to other departments. He said that it was essential to keep trade going, and in explaining that he had included luxuries among the goods to be covered, he said that if they were excluded, it might act as a deterrent to employment in times of peace. But this state of international tension, these fears and forebodings as to the possibility of war, may continue for a very long time. There is a tendency to believe that we are dealing with an emergency which may arise very quickly, and it may—God forbid that it does—but if it does not arise very quickly, that does not mean to say that it will never arise at all. It is one of the most horrible things to contemplate that this atmosphere—shall I call it this prewar atmosphere—may continue for a very considerable time, and its effects upon trade and business and the livelihood of

the community may become increasingly serious. The right hon. Gentleman is right when he says that we must take steps which will keep trade going and do what we may in peace time to prevent employment drying up because of the fears of what the future may hold.
These things apply with equal force to other forms of property, and I would add a word in regard to house property. I admit that it is difficult to devise a scheme of insurance to cover so wide a field, but because of the breadth of the field and the number of people involved, the necessity for it is all the more urgent and important. Let us consider one or two of the outstanding reasons why it is necessary to do something about insuring house property. First of all, the great majority, or very large numbers, of the owners of house property are people of slender means, who have invested their life savings in the purchase of the house in which they live. In a very large number of cases that house is still the subject of a mortgage, and they have to find periodical repayments. The absence of any insurance of house property is having a very unfortunate effect on the value of bricks and mortar as a security for advances, and unless some form of insurance can be devised, not only will the business of building be very difficult to undertake, but advances will be called in when house property is the security for the advances. You will get, as an hon. Member said just now, a contraction of all kinds of business enterprise because the value of the underlying security is in jeopardy owing to the risk of war.
There is another aspect of it which the right hon. Gentleman referred to when he was speaking about the necessity to insure goods lying in warehouses and forming part of the stock in trade. With regard to the inequalities as between people living in one part of the country and another, as he rightly said the Government must do what it is possible to do to remove those inequalities. It is not equitable that people living in the West Country should find their life more profitable than people living in other areas. This inequality is beginning to show itself because of the absence of any form of insurance for fixed assets. I do not think the situation is going to be met by referring the matter to a committee to consider some form of mutual insurance. All


the problems which confront the Government in devising a scheme of property insurance will confront anybody who tries to devise a mutual insurance scheme, with the great additional difficulty that they would be unable to put behind any scheme the resources which the Government will be able to provide.
These criticisms are held in common in all parts of the House. I recognise that the difficulties are very great, but so great is the need and so increasingly strong will become the pressure to meet the need that it is time now to consider it, and in my view it had best be considered in relation to this proposal which is now before us. I think that the right hon. Gentleman will be driven to embark upon a much wider field of Government insurance and that he will have to set up a State insurance corporation to undertake the numerous forms of war risks. If that be the case, as I believe it will, it would be very much better if all these different forms of insurance were undertaken by the same body and the risks thus pooled. It is a most undesirable thing that there should be varying qualities of risk being taken in part by private persons and in part by the State, with an unwritten but implied State guarantee. Therefore I suggest that the Government should set up a State war insurance corporation and should set about devising a scheme to cover all forms of war risks. We must not forget that with the outbreak of hostilities the insurance companies are, in a way, relieved of a great deal of liability which they at present cover. The fire risk becomes very largely a war risk and so do other risks. Fires which occur as a result of the action of hostile aircraft are war risks. It is going to be extremely difficult to discern what are the causes of fires in those circumstances. The whole business of insurance will be taken right out of its ordinary commercial setting, and it is proper that the risks involved by war should be borne by the community as a whole and spread over everybody in relation to the property which they own so that they make some contribution to the risk, and not in relation to the locality in which they happen to live or to which they may proceed.
I suggest that this scheme should be merged in a general State insurance corporation which will undertake the insurance of war risks of all kinds. The Government have at their disposal what no

private person can have—data which will enable them to draw up a workable scheme. If it is impossible to undertake the unlimited scheme applying to all kinds of property, it is equally impossible to undertake the sort of liability which attaches to ships, cargoes and goods. The only difference is the difference in magnitude. That problem has to be faced. It may be that it will be necessary to put some upper limit to the amount which can be payable. The most urgent case is the case of the small owner of a dwelling-house. He ought to be covered against war risks. It is an intolerable situation that people whose entire means are sunk in a small house should be at the mercy of mere chance as to whether their entire assets are destroyed. Therefore I urge the Government, although this scheme in itself is excellent as far as it goes, not just to relegate this thing to the consideration of some committee, but to go ahead with the preparation of a comprehensive scheme of State insurance.

7.8 p.m.

Mr. Bellenger: I should like to make reference to some words which have fallen from the hon. Member for the Central Division of Leeds (Mr. Denman). I was interested in the scheme which he outlined, but I do not think I quite understood how it is going to work. No doubt that can be gone into more fully by the committee which is being set up by the Government. I think that he was perhaps a little optimistic about the 50 years in which he hoped the President of the Board of Trade would have to build up this fund.

Mr. Denman: The 2s. premium was only the peace-time premium. When war broke out the premium would rise.

Mr, Bellenger: I understood that the hon. Member referred to a period of 50 years in which to build up the fund.

Mr. Denman: Fifty years of peace and 50 years at 2s.

Mr. Bellenger: Does the hon. Member believe that we are going to have 50 years until war breaks out? I should imagine that the Government consider that peace will not last as long as 50 years, perhaps not so long as 50 months. The remarks which the hon. Member for Central Leeds made about the last war and the instances


which he related are not likely to be paralleled when the next war occurs. It is obvious that the scheme we are considering to-day will probably go by the board in the tremendous destruction that will be caused, and I do not think that the Government are tackling this matter on the right scale. Instead of looking at the whole picture they are looking only at a part and are trying to make provision for a special sectional interest, just as the Bill last Friday dealt with sectional interests. This is going to deal only with a certain interest—that is the owners of movable assets—and the owners of fixed assets have to wait until the end of the war and hope for the best. I realise that it will be impossible to compensate the owners of fixed assets, and probably also of movable assets, while the war is going on. Where is the money coming from to compensate any of these people during war time? There will be a reduction in taxable revenue because, as is shown by the figures which the right hon. Gentleman gave, if the capital value of house property and effects, which are probably the biggest part of the real wealth of the country, is destroyed, where is the Government going to get its taxation revenue? If a house is destroyed and there is no rental income it is obvious that there can be no taxable income.
It is certain that the next war is going to be one in which every single individual will be engaged and in which every single individual service will probably be at the disposal of the Government, and in that case every effort must be directed to communal ends. Therefore the idea of just compensating owners of ships or cargoes merely to keep the wheels of trade going round is not the right way to look at the problem. Everybody realises that we must keep the two-way traffic going, although I hope that there will be no imports of luxuries during the' next war, however much the Government may consider the export of luxuries to be necessary. We have to keep the two-way traffic going in order to supply our needs and not primarily to see that profits are made. It follows that if it is necessary that we should keep our ships going in order to import and export it would also be necessary for the Government to go into the business, not to manage it as a Government, but in just the same

way as they are going into the insurance business. They will have to take control of it the same as they are contemplating doing in the case of railways and probably mines.
Therefore I suggest to the right hon. Gentleman that he is making a big mistake in attempting to make a scheme of insurance for the ostensible purpose of keeping our imports and exports going but with another and possibly larger purpose of compensating special interests. Other speakers have referred to the lack of insurance schemes for the owners of property, particularly the small owners. The owners of private house property are the backbone of the country because they are hard workers, they are not speculative, they generally invest the result of their thrift in their houses, whereas many of our shipowners and those engaged in that industry are engaged in a speculative trade to make huge fortunes for themselves, which they will be enabled to do more easily as a result of war and by this scheme than they would otherwise do in peace time. You would get on the one hand the owners of fixed property without any cover at all—just consider their feelings in the matter—and on the other hand you would get the owners of ships and cargoes being compensated if their ships were damaged or lost or their cargoes were damaged or lost.
The inevitable result would be that the one part of the community would feel that it had lost everything as the result of the war and at the same time it would know that another small section of the community was being compensated out of the whole community efforts. Even if the insurance premiums cover the compensation they still come out of the pockets of the community. To the extent to which the Government had to put money into the scheme if it were not watertight from the point of view of the premium income, it would mean that taxation would be levied 'in order to compensate one particular section of the community. What would be the effect of that on the minds of masses of people in this country? Should we then have that unity and that combined national effort to prosecute the war for one purpose, namely, the overthrow of those systems which had attacked this country and disturbed the peace? We should not. Discontent would


be rife, and a feeling might swell up which would endanger the State itself.
If I understood the right hon. Gentleman aright he was not against the principle of insuring house property, or fixed assets as I prefer to call them. What he said, in effect, was that while we can devise a scheme for the owners of move-able assets—cr one part of moveable assets in the shape of ships and cargoes and commodities, amounting in his own figures to £2,380,000,000, we cannot do it for that large body of owners of house property and effects the value of which he put at £12,000,000,000. In other words, the right hon. Gentleman says, "I can get a scheme on an insurance basis which will cover one-sixth part of the owners of property, but not one for the other five-sixths." As the hon. Member for the City of London (Sir A. Anderson) said, it would not be impossible to get a scheme going on an insurance basis. I do not think it is beyond the wit of the City of London or the insurance companies to put forward a scheme. The owners of house property already have a scheme in operation, and as far as I could understand it, I think that what the right hon. Gentleman said this afternoon will put the finish to that scheme, because he so ridiculed the idea of devising an insurance scheme that those house property owners who have got this scheme going among themselves will realise that it is not worth much.

Mr. Stanley: The argument I was advancing was against a scheme under which, in peace time, and for a premium, the State undertook the payment in full at the time of damage of any losses incurred. I was against that on the ground that I do not believe that the State could honestly give the promise to-day that they would do that, believing that they could in all circumstances carry it out. I said that was quite different from a scheme of mutual indemnity, whether worked under State contribution or not, under which the owner of house property is paid in proportion to what is in the fund or what income is available at the time and under which there is no pledge, which might be broken, to pay in full.

Mr. Bellenger: I am glad to hear the right hon. Gentleman's remarks. Do I understand that the object of this Bill is to compensate the owners of ships and

cargoes and goods immediately the damage occurs? If that is so, then in equity one ought to devise some scheme for the owners of fixed assets. So far as I am the owner of a house I am quite prepared to wait until I can draw my policy money as long as I have got the policy, but at the moment and under this Bill there is no policy for the owner of house property. All he has is a promise from the Chancellor of the Exchequer that at the end of the war some sort of compensation may be paid to him out of national funds. I say that that is not good enough. I am not questioning the Chancellor's good intentions, but we have had experience in man' instances of the good intentions of this Government going astray. If the Government are prepared to bring in legislation to compensate one section of property owners we ask them to do the same for the other section.
As to the method of payment and the time of payment, we all recognise that if a war were to come, with all the inevitable destruction and devastation that would occur, it would be physically impossible to re-erect those houses which were destroyed, and perhaps it might be physically impossible to rebuild all the ships which were destroyed, but the Government are saying that even if they do not rebuild the ships they will give the owners some tangible compensation, in so far as currency or bonds are tangible, and all we ask is that the owners; of fixed assets should have the same treatment. If property owners had to pay a premium in peace time or in war time for such a Government undertaking, I do not think they would mind it, but I would warn the House that the premium might not be so low as a good many Members have put it this afternoon, probably it would be considerably higher. Still, the owner of a small house who may find the whole of his savings gone through the dropping of one 500–1b. bomb would be satisfied, though his house were no longer there, if he could get only 50 per cent, of the value of the house from some Government scheme. That would be better than nothing, and that is all we are asking for.

Mr. George Griffiths: Did I understand the hon. Member to say that we on this side of the House would be satisfied with 50 per cent.? If so, I do not want the President of the Board of Trade to think that the hon. Member is speaking for me.

Mr. Bellenger: I do not think it is necessary for me to explain that Members on this side want the full 100 per cent., but whether we could get it is another matter. Like the hon. Member for Central Leeds (Mr. Denman), whether it is a case of war loan, house property, ships, cargo, goods or whatever it is, I have my doubts whether 100 per cent. to-day will be 100 per cent, after the next war is finished, at any rate as far as real wealth is concerned, and I am not talking about Government paper. Coming to the Bill itself, it is an intricate one and, though a little more light has been thrown upon it by the right hon. Gentleman this afternoon, I do not think any of us can be blamed if we do not understand all the Clauses even after his explanation. I have one or two questions to put. Regarding the insurance of cargoes, what is to be the position of cargoes carried in foreign ships? Will the Bill compensate owners of those cargoes, or will the contents only of British ships, those either coming to this country or leaving this country for foreign ports, be covered? It may easily happen that we shall not have enough British ships to bring here all the cargoes we require, and if some sort of guarantee is not to be given to the owners of foreign ships we may be enforcing a blockade of our own country.
Further, I should like to know to whom the compensation is to be paid. Is it to be paid to the importer of the cargo, or to the exporter abroad. In other words, in whom is the title to rest? Clause 10 sets up a system of licensing for those who engage in the insurance business. As I understand it, after war breaks out nobody is to engage in the insurance of goods or cargoes or ships without the permission of the Government. Do I understand that it is the intention of the Board of Trade to inaugurate a system of licences under which certain people or corporations will be licensed to engage in the insurance business during the war?
Reference has been made to the lack of provision for compensation for personnel. True it is that we have an undertaking that if merchant seamen lose their lives their dependants will be compensated on the same scale as for those engaged in the Navy. That is satisfactory as far as it goes, but here, again, we have no

legislation to that effect. Therefore, I would conclude as I began, by urging upon the Government not to look at this subject in a small or sectional way, but to realise that the next war will have to be fought by the whole nation and that the Government must take steps to see that the dependants of no individual who loses his life, whether he be a conscript militiaman, or someone engaged in a reserved occupation or engaged in the various duties in connection with our shipping, shall suffer loss in so far as the Government can compensate them by money. I hope that in the interests of national unity now, and later if war should unfortunately come, the right hon. Gentleman and his Government will legislate for the whole nation, because nothing would be more fatal to our cause than that the suspicion should get about among our people that the Government were going to protect the big owners of property and neglect the small owners.

7.29 p.m.

Mr. David Adams: I am glad to join with my colleagues here in a tribute to the President of the Board of Trade for the very lucid manner in which he has explained this somewhat technical Bill. It appears to be the more technical because we in this House have not been much brought into contact with insurance matters; but that situation is not likely to continue, for all sections of the community will be looking to the Government for this requisite protection in the event of war emergency. The Measure before us is, of course, based upon the war risks insurance scheme which existed during the last War. That scheme was satisfactory to the shipowning community, to the general trading community affected by shipping, and to the State. We can say that with satisfaction, but we recoguise that although the scheme was satisfactory in the days when war was relatively restricted the Government are not looking forward to the new situation which has arisen, and in which another section of the community, a particular section, is brought within the war zone.
That point has been emphasised by previous speakers in this Debate. The householders of the country will be brought within the ambit of war operations and will, indeed, become combatants in the war. Our civilian population are receiving protection from the


Government to some extent in other ways, but it is clear that the greatest dissatisfaction will prevail if the Government, in the changed circumstances, are not prepared to recognise the liabilities and responsibilities, as well as the possible certainty of great losses, of that section of householders and property owners in this country. I cannot believe that we shall not have some national scheme. The proposition submitted by the President of the Board of Trade may be amplified to meet the demands that we are making that the scheme endorsed by the Government should not be this simple, easy and restricted scheme, which was carried out without a penny of cost to the taxpayers, and at the end of the last War showed a very substantial profit to the credit of the Government, of war risks underwritten by the Government. We are calling upon the Government, after admitting financial liabilities on behalf of the shipowning community, to extend those liabilities, and begin de novo so far as those financial liabilities affect householders.
There are in the Bill certain points to which further consideration should be given. On page 13 of the Bill, the proviso to Clause 15 states:
 Provided that a ship shall be deemed to be or to have been owned by the constructor thereof, and by no other person, at all times before the completion of the construction of the ship.
That is not the position of affairs and is not an accurate statement in perhaps nine cases out of ten. Perhaps the Parliamentary Secretary will take note of the fact that almost every shipowner pays for his vessel by instalments over a period of months before he receives delivery of the vessel. I was talking to a shipowner this week-end. He is having built on Tyneside a vessel costing £150,000. He pointed out that he would be paying for the ship in five equal instalments, and that if the decision were as set forth in the Bill, ship constructors would certainly not admit liability for insuring the parts of the vessel for which the owner had already paid cash. The shipowner would be called upon to cover those proportions of the vessel for- which he had paid. He estimated that for a 2 per cent, premium per month, which is likely to be the amount charged for war risks, there would be a charge upon him of something like £1,800 per month. We

shall require some other form of insurance, not to place the liability for this very heavy war risk charge upon the shipowner at a time when his vessel is laid up and is unable to earn profits or dividends, but to cover the liability which I am advised the ship constructor will decline to accept.
There ought to be some statement with regard to the carriage of cargoes. During the last War we were fortunate in having a large supply of neutral tonnage to supplement British tonnage, carrying goods to and from this country and our Dominions. We ought to know, and the shipping community would desire to know, what steps the Government are proposing to take with regard to the insurance of ships and of cargoes upon the high seas employed by British owners or by the British Government. I was greatly surprised that it should not be explicitly stated in this Measure, which deals with shipping, that there would be compensation for personal injury of masters, officers and seamen. We are informed that some form of compensation is to be given to them and to their relatives in case of death. I take it that the reason why we are advised that livestock, crops, plants and trees are not to be insured is that the Government are not prepared to accept full liability for the various classes in the event of an outbreak of hostilities.
As I read the Bill, the discharge of cargoes over the side will not be protected, and lighters and barges are explicitly excluded from protection. This is a remarkable situation, which is likely to create a sense of disquiet and uncertainty. Any Measure covering liabilities attaching to ships should embrace not only the cargoes in the vessels but the barges and the lighters in which the cargoes proceed to the warehouses. As I read the Clause it is intended to cover the goods only up to their delivery on the quays, and that liability will cease on the goods being delivered to the quays.
I support the view expressed in the Amendment that the situation will be so changed as to bring within the ambit of war risks and liabilities other classes in the community who were virtually excluded during the last War. The bombing aeroplane has brought all sections of


the community within the ambit of war. For that reason we cannot justify any partial form of war risks insurance. The Government in undertaking this liability, which will probably be a lucrative one for them, will be sadly lacking in a sense of responsibility to the entire community if they do not evolve, as they can, a comprehensive scheme which will embrace all forms of liability likely to be affected in the event of a war emergency.

7.42 p.m.

Sir Joseph Nall: I do not want unnecessarily to prolong the Debate, but, while the proposals of the Bill are generally welcome, I wish that a little more regard had been paid to the representations of the trading community which have been made to the Department from time to time on this matter, particularly regarding the export trade. With regard to marine risks, the real weakness of the Bill is the limitation of 30 days. I can well understand that there must be some limitation; otherwise the premium would have to be raised. It should have been possible, 30 days being reasonable for the first period, to have arranged the second period for a slightly higher premium, and even a further period of 30 days. It is held in the textile areas that a very strong case can be made out for a period of six months. There may be objections to that, but a 30-day period is clearly too short. It will not meet the case of a large number of the export trades, particularly in textiles. I hope that the President of the Board of Trade will examine this point and will find out whether the period can be extended.
It must be remembered that on the last occasion the premiums were something like £5 when the maximum was reached. I do not know whether, in the event of war breaking out, submarine risks will be left where they were on the last occasion, but we ought to take it that those risks will be met. There is considerable scope for that in the provisions of the Bill, and an extended period ought to be legislated for. Otherwise, the export trade will have to come to a standstill immediately war breaks out.
As regards Part II, there should be some assurance that the permissive powers of the Board will be utilised immediately war breaks out. To leave any

uncertainty as to how these permissive powers are to be exercised would nullify the provision, and I hope that my hon. Friend who is to reply may be able to say something about that. The question of property and buildings is outside the scope of the Bill, but it is an essential question, and I hope we shall hear something more than has already been announced on the matter, but, so far at any rate as regards the Bill which is now before the House, I would urge the Government that the period of 30 days for marine risks in export matters is wholly inadequate. It is good as far as it goes, but it needs to be extended. If the premium rises as the period is increased, that would be a deterrent, and obviously those concerned would resort to the extended period of insurance at a higher rate of premium only if it was really necessary. I would ask my hon. Friend to consider that question, and, if he can make some announcement upon it, it will relieve anxiety in a good many quarters.

7.47 p.m.

Mr. Alexander: This Debate on a very important Bill, fraught with grave national considerations and some considerable financial responsibility, seems to excite far less interest than one would have imagined on the aprt of those Members who usually support the Government and claim that they are entitled to do so on business grounds. We have had a considerable number of speeches from this side, and it is rather significant that, on a Bill covering such a breadth of risk to business, so little interest should have been displayed by the Government side of the House. The Bill has brought us very sharply up against the risks to be met. I do not think that the President of the Board of Trade, in his speeches during the last two years, has uttered any more serious words than those he used at the outset of this Debate, when he pointed clearly to the fact that the risks which have to be faced must be assessed on the line that in the next war the offensive will not be overseas, but in our own cities, and that our women and children, besides ourselves, will be in the front trenches. That is a summary of what the right hon. Gentleman said to us, and we are really facing the responsibility of insurance against risks to be incurred in these circumstances—circumstances which have arisen almost entirely


because of the failure of the Government's foreign policy.
There is, of course, a vast financial responsibility to be met in this matter if war supervenes, I could not help thinking, while the President of the Board of Trade was speaking, of the very striking and strong remarks that the Chancellor of the Exchequer has made from time to time during the last two financial years in introducing financial Measures. He has, so to speak, patted himself and the country on the back because, he said, in the event of a major struggle breaking out in Europe, our superiority of economic resources will perhaps be the determining factor. But when we come to deal with the possible losses that will be suffered by citizens of this country in the event of war, we are unable to guarantee even the basis of an insurance scheme under which to repay to our own citizens anything like the losses they may incur. That is a pretty comment on the great confidence which the Chancellor has displayed with respect to our estimated superiority in economic resources as the determining factor in the event of war.
I entirely agree with my hon. Friend the Member for Seaham (Mr. Shinwell), who, I thought, made an excellent speech on a very difficult and technical subject, that with the principle of the Bill, so far as it goes in this limited sphere, we have no real quarrel. In the main we are concerned about two things. The first is that, as regards the insurance proposals and the re-insurance proposals which appear in the Bill, we are not yet satisfied that the Government are going to get the best as well as the worst of the risks reinsured in their fund, and I hope the Parliamentary Secretary will understand that the intervention of the President of the Board of Trade during my hon. Friend's speech has not by any means satisfied us. If you are to re-insure with Government cover up to 8 per cent, of the risks, it is very important that the Government should have the premiums in respect of the best as well as the worst of the risks to be encountered. It should be made plain whether or not it will be possible, under the explanation of the President of the Board of Trade, for there to be more than one pool of mutual ship-owning risks. If there is going to be more than one pool, you have have the position that a pool of certain risks may be formed

and handed to the Government for reinsurance, while another pool, in which there is a possibility of making a profit, may be kept within private control and private profit. When one considers the breadth and variety of interests in the shipping world, it is quite possible that there might be three or four different mutual pools. Once the principle is adopted, unless the Government take particular care before the Bill becomes law to see that there is only one mutual risk pool for the whole of the shipping interests, they will have to face this possibility in connection with re-insurance.
Our second main quarrel with the Bill is with regard to what it leaves out. What it leaves out is to be found in two main categories. The first relates to the provision made for the insurance of goods. As my hon. Friend has said, it leaves out the actual buildings, and in some cases the vessels, and the machinery and plant which would be essential if the goods themselves are to be insured. For example, I do not know whether the President of the Board of Trade has considered what is going to be the position of the food trade in time of war if his insurance is to extend only to goods.

Mr. Stanley: It covers the food trade.

Mr. Alexander: Those of us who have had to engage in collaboration with the Department on such matters as evacuation, the diffusion of stocks, and the strengthening of staffs in the receiving areas in the event of evacuation, have been anxious about the attitude especially of the smaller traders with regard to carrying the risks involved by the extra stocks they are asked to hold. But that is not the whole story. Let us take the position that the President of the Board of Trade has urged. He has propounded a scheme for the carrying of extra stocks of flour, and is actually paying a subsidy of 2s. 6d. per cent, for the carrying of those extra stocks. But what on earth is the use of, say, one of my societies having 1,000extra sacks stacked in a bakery capable of baking perhaps 1,000 sacks a week, and then having the whole of the mass production machinery of that bakery destroyed? It does not stand to reason. If you are to insure special stocks of food, it is equally important that you should insure, with those stocks, against the war risk to the actual


productive machinery that turns those stocks into food, or turns raw material of an industrial character into the other things that are needed for the national welfare. The President of the Board of Trade ought to consider that point at once.
We are to be asked shortly to pass a Financial Resolution, and I think the right hon. Gentleman ought to let us know at once whether he can undertake to reconsider this matter. He ought not to ask us to go into discussions on the Committee and Report stages of this Bill without being able to extend the functions of the scheme. I do not see any reason why that cannot be done. It seems to me that, quite apart from the wider questions of policy in relation to insurance against war risks, the job is being left less than half done unless we cover as well the auxiliary vessels, the warehouses, and, above all, the production machinery and plant by which the stocks insured are put into effective use.
Every Member who has spoken from this side, including the hon. Member who spoke from below the Gangway for the Liberal party, has supported our submission that the Bill ought to include some wider provision with respect to national property, and especially the property of our householders. What has been said about the position that may arise in the event of war and great losses being incurred by the whole community, with possibly great depreciation, not only of property, but of the currency, may be very true, but surely, if we want to do the best we can for our country after a war has happened, if it should happen, we ought to make every possible preparation we can now for avoiding loss of the revenue which will then be so much needed, and one of the things we shall have to do is to put our householders in general, and in many cases also our property owners who have possession of the small tenant class of house, into a position, first, to be able to replenish their accommodation, and, secondly, to provide from their property the revenue which the State, whatever Government maybe in power, will require for the Tunning and reorganisation of the State. Just to leave that to see what the Government can afford to do in the way of replenishment of capital losses at the end

of a war is really to make no constructive effort at all.
Those people who are interested in that class of property could, I am sure, be relied upon not only to welcome but to support a scheme which would provide premiums on this class of property, in whatsoever part of the country it might be situated, in order to create the nucleus of an insurance fund. I am not in a position, any more than are the techinical advisers in the insurance world whom the President, I suppose, has consulted, to say what are going to be the average risks; I know there is great difficulty; but surely that is no excuse for not creating by a united effort the nucleus of a general insurance fund. I hope that the President of the Board of Trade has read this week's "Economist." I know he has had but short notice, as it is published on Friday or Saturday, but it is a paper that I read very carefully, and I noticed in the current issue, at the end of a general article on war risks, this paragraph with regard to the problem of buildings:
 Various enterprising concerns have stepped in where the British Treasury fears to tread, but the confidence they enjoy is not widespread, and nothing can solve the problem except a national compulsory levy chargeable on all buildings irrespective of their site and their prospective danger—an ad hoc ad valorem tax imposed to meet a common national risk.
There you have the basis of the case that my hon. Friend has put. As far as property risks on land in the event of war are concerned, there is a great deal to be said for a charge to be made in order to create a fund for this purpose, and for it to be general and compulsory. If you look at the plans that the Government have already made in consultation with local authorities for evacuation, under which you have arranged to evacuate from the more vulnerable industrial areas millions of people, you will be sending into other areas the actual weekly custom and trade of the people who have been evacuated from those areas where the greatest loss is possible. If that is so, the owners of property in the other places are the people who ought to be paying their share to a common fund for the general risk. It seems to us that the Government have, very late, begun to tackle this problem of insurance risks. They have done it on a very limited scale and they have left a very large field un-


covered, a great part of it represented by a considerable section of the poorer classes of the community who have been thrifty and built up their habitations for themselves. I hope, therefore, that whilst the President will recognise that we are not against what is in the Bill in principle, the points that we have put to him ought to be considered and, unless we can receive an assurance of far greater weight and emphasis than he has given us, we shall be bound to vote for the reasoned Amendment that we have moved in the hope that it may stir the Government to wider and more effective action.

8.3 p.m.

Mr. Cross: I think the Government have every reason to be satisfied with the welcome that has been given to the Bill. I am speaking of the welcome that has been given to the contents of the Bill, in connection with which only a few small points have been raised, and no one has quarrelled with the main principle. What criticism there has been has been mainly concentrated outside the Bill. The right hon. Gentleman the Member for Hillsborough (Mr. Alexander) said he was not satisfied as to the possibility of the insurance market being able to pick and choose war risks in respect of ships and cargoes. I understand that practically all British ships are already in the War Risks Associations and that the very few that there are outside will presumably in war—I cannot imagine that they will go to sea without being insured—ask for insurance direct from the Government. There does not appear to be any need for compulsion in that case. As to cargoes, they can be insured under conditions of war either with the Government Cargo Office or, alternatively, in the market. The Government do not propose to make insurance with the Government Cargo Office compulsory, but at the same time the Government Cargo Office will value the risks. They will not charge a flat rate of premium but will put their premium up when they consider that the risks require it, so that there does not seem any reason to expect that they will be landed unprofitably with bad risks.

Mr. Alexander: The hon. Gentleman has partly answered my question but he has not answered whether, dividing trade into compartments, they can, within the Mutual Risks Association, make separate

pools and decide to accept responsibility for certain pools and hand the others over only for re-insurance.

Mr. Cross: Under the agreement the Mutual War Risks Associations re-insure with the Board of Trade 80 per cent, of King's enemy risks and retain 20 per cent, themselves. In the case of a ship which is not accepted or has not applied for entry into the Mutual War Risks Association, my hon. Friend the Member for Hulme (Sir J. Nail) made some points but, as he has disappeared, I will communicate with him privately. The hon. Member for Bassetlaw (Mr. Bellenger) asked me a series of questions which I tried to note down with the rapidity necessary in view of the rate at which they were delivered. He asked whether cargoes in foreign ships were covered under the provisions of the scheme. The answer is that they are covered providing they are coming to or leaving this country. In time of war there is power under Clause 2 to insure cargoes in foreign ships, or foreign cargoes, even when they are not coming to or leaving this country. That facility of insurance may perhaps in certain circumstances be of value when we are desiring to secure the services of foreign ships.
The hon. Member asked me whether insurance is limited to British ships. It is in time of peace, but in time of war there is provision under Clause 2 for the insurance of neutral vessels. He inquired to whom the insurance money would be payable. The answer is, to the person who is entitled to call himself the owner of the goods and not some other party who may have an interest in them. He raised a further point with regard to Clause 10, to which the reply is that there is an absolute prohibition against other concerns insuring war risks which are already insured by the Board of Trade. I think the point he had in mind related to persons who might be authorised by the Board of Trade. That only covers the functions of agents who would be acting on behalf of the Board of Trade under Part II of the Bill.

Mr. Bellenger: Am I right in assuming that the position will be that on the outbreak of war the Government itself will be the only insurance company and that, in so far as any private people act, they will act as agents?

Mr. Cross: That is quite correct under Part II. Under Part I the Mutual War Risks Associations are likely to carry on for a considerable time, if not for the whole war. That will depend on circumstances.
I think the speeches which were, perhaps, the most helpful were those in which Members attempted to explore the possibilities of the insurance of property with the aid of their own calculations, because until figures were inserted it was really quite impossible to arrive at any basis of argument. The hon. Member for Central Leeds (Mr. Denman) suggested that the scale of damages might amount to £600,000,000 a year. Without saying that that is a good or a bad figure, it is at least a substantial one, so large that it recognised that the contribution which might be expected, of £12,000,000 a year, will take the best part of 50 years to meet the situation, and consequently a premium basis of that kind would be of very little use. He proposed, therefore, that the situation should be met by the issue of redeemable certificates, which apparently are to be negotiable, and he thought no one could say what would be their value at the end of the war. I felt that he was approaching the truth when he took that view. He, nevertheless, advocated the scheme which he claimed will give confidence, but certainly false confidence on his own showing, to the holders, and so false confidence would be given by the Government. It was something of a contrast to what my right hon. Friend said, that the scheme must be one which people would honestly believe could be carried out, and that it would be dangerous and dishonest to assure people that in certain events they would get certain payments unless we were reasonably certain that they would in fact get the payments, and that met with universal applause. [Interruption.] I will say widespread applause, but I thought when we were claiming that we ought to be honest I should be right in saying it had met with universal applause.

Mr. Shinwell: The hon. Gentleman, I think, appreciates the importance of the suggestion that certificates should be issued in lieu of cash payment, because it is clear that the Government could not meet claims entirely in cash. But if there is no value in such a certificate, what

value is there in the assurance given by the Chancellor in January in respect of property claims?

Mr. Cross: I am basing my argument on the argument put forward by my hon. Friend, which was that a certificate might well have depreciated in value by the end of the war. On the other hand if, as my right hon. Friend proposes, these claims are to be met as far as possible by compensation, that issue does not arise. In so far as it is possible to meet these claims, the question of the depreciation of the pound does not alter the situation. A house can be rebuilt, but a certificate would be a wasting asset, and you would have no notion whatever what the value of it might be by the time you got to the end of hostilities.
The hon. Member for East Ham, South (Mr. Barnes) also ventured into the realm of figures. He suggested that the rate of damage might amount to 10 percent, per annum.

Mr. Barnes: I said it would be from 5 to 10 percent.

Mr. Cross: If I take the upper figure, I shall not be misrepresenting the hon. Member. He assumed an upper figure of 10 per cent., and was prepared to accept the round figure given by my right hon. Friend of £12,000,000,000 to cover plant and property in this country. On that basis we should have not £600,000,000 a year, but £1,200,000,000 a year damage in the course of a war.

Mr. Barnes: Not per year.

Mr. Cross: I understood that the hon. Member meant 5 to 10 percent, per annum.

Mr. Barnes: No.

Mr. Cross: I do not see what is the use of percentages unless you relate them to a period of time. You can hardly say that the proportion will be 5 per cent, during a war regardless of the period of the war. In any case the hon. Member would accept the figure of £1,200,000,000, not as related to a year but to some other period. I wanted to see what was necessary as a premium in order to make some impression on that figure of £1,200,000,000. The hon. Member named a 3 per cent, premium. That, on a £500 house, would mean £15 a year, or 6s. a week, added to the rent in respect


of insurance. That is an inescapable conclusion from a 3 per cent, premium. If we are to add 6s. per week to the rent. we have got into a realm which is wholly impossible. We have only to examine the figures given by hon. Members in order to see what enormous eloquence has been wasted on fantastic arguments.

Mr. Barnes: That is a travesty of the case.

Mr. Shinwell: If, arising from the payment of the high premiums that the Parliamentary Secretary has suggested, £800,000,000 is claimed, and the Government are unable to meet that claim, it is quite clear that the Government will not be able to pay compensation for damage to property.

Mr. Cross: You cannot, in view of the astronomical figures being taken by hon. Members, calculate what your position may be at the end of the war. All you can undertake to do is to pay such compensation as the circumstances at the time and the national position may permit.

Mr. Alexander: Does that mean that the Government will undertake no real liability at all, and that owners of small property cannot look forward with confidence to anything? What objection is there to taking some premium now from all property owners, and putting it away for use when the time comes?

Colonel Baldwin-Webb: Should we not wait for the investigations of the committee? The situation must be judged in relation to the information available to the committee.

Mr. Cross: The right hon. Gentleman the "Member for Hillsborough is not right in saying that the Government will not undertake anything. The Government adhere to the statement made by the Chancellor of the Exchequer on 31st January last in regard to compensation which might be paid. The hon. Member for East Ham, South and the hon. Member for Bassetlaw (Mr. Bellenger) declared that there was no consideration here for the small man. I felt that in saying that they did a great deal less than justice to the speech made by my right hon. Friend in introducing this Bill. The small man, on the showing of my right hon. Friend as well as on the declaration of the Chancellor, enjoys a greater prefer-

ence than does his larger neighbour. The statement of my right hon. Friend shows that the Government have adopted the attitude that the victim should not be left alone, unaided, to bear his loss, but that the responsibility of repairing or reconstructing his property should be shared by the community as a whole, and that, as far as possible, the Government would pay in full up to a certain limit and thereafter at a rate which would be graded, thus giving a definite preference to the small man. As to the small retailer, the policy referred to by the hon. Member for Bassetlaw is covered by Part II of the Bill, under the commodities insurance scheme. The hon. Member for Seaham (Mr. Shinwell) referred to crops, livestock and so on. It is our purpose to include, by order, all goods which it may be desirable to cover. It will be necessary, I think, to redraft Clause n, Sub-section (2) so as to provide for the exclusion of agricultural produce and livestock while it is on the farm.

Mr. Shinwell: Am I to understand that it is the intention of the Government to redraft this on the Committee stage?

Mr. Cross: That will be necessary.

Mr. Shinwell: Does the hon. Member agree that if the Government have decided, as a result of my submission, to make this Amendment, it was an important point?

Mr. Cross: I have never questioned that it was an important point. As I said, we must redraft this to exclude agricultural produce and livestock while it is on the farm, and to make separate provision for goods coming under those headings in so far as they are so situated. [An Hon. Member: "Only on the farm."] Yes. The hon. Member for Seaham also raised points Concerning goods which have been discharged from an insured vessel, and pointed out that they would then be placed in an uninsured lighter, and from there their transport would be continued in uninsured trucks and lorries, and that they would finish up in an uninsured warehouse. That is a perfectly correct interpretation of the Bill as far as it goes, but all these forms of transport, or warehouses or essential plant or property would have to be covered by a compensation scheme under some special reconstruction body, and where that was found to be


essential to the conduct or life of the people, it would be necessary that prompt payment should be made in order to provide the means for reconstruction.

Mr. Shinwell: May we have this clear? We want to know what this Bill is intended to do. Do I understand from what the hon. Gentleman has just said that, although vessels and cargoes are to be insured within the scope of this Bill, the lighter in which the goods may be transported and the trucks and lorries in which they may be transported from the dock to the warehouse, are, in the event of damage being done, to be compensated only at the end of the war?

Mr. Cross: I think I used the words "prompt payment," and that is certainly for payment at the earliest possible moment if they are considered essential to the conduct of the war. That does not mean paying compensation at the end of the war.

Mr, Shinwell: I am sorry to have to continue to interrupt, and I am not doing it with a desire to waste time, but I want to be clear as to what the hon. Member says. I understand that there are two propositions before us. The one contained in the Bill provides for immediate compensation on the basis of insurance for ships, cargoes, and goods, as the case may be. The other proposition, which is not before us in this legislation, but which is present to our minds, is the statement made both by the Chancellor of the Exchequer on 31st January, and by the right hon. Gentleman this afternoon, namely, that, as regards other forms of property, compensation will be considered not during the war, but at the end of the war. These are the two matters before us. I want to know, therefore, whether it is the case that the ships and the cargoes are to be immediately compensated in the event of damage under the insurance arrangements, whereas lighters, trucks and lorries and warehouses will not be compensated in the event of damage until the end of war; or have the Government changed their mind in the course of this afternoon's Debate?

Mr. Cross: It is the hon. Member who, after all, cannot carry everything in his mind that was said by my right hon. Friend, is under the misapprehension. Let me read out once again to the hon.

Member the particular words that were used by my right hon. Friend this afternoon, and I think he will find that they are wholly consistent with what I have just said to him. My right hon. Friend said:
 It has always been recognised, and it was expressly stated that emergency reconstruction of essential property, including, where necessary, housing accommodation, would have to be undertaken with Government assistance as soon as possible after the destruction of such property occurred.

Mr, J. Wilmot: This is a vitally important matter. Is there to be any premium for this new insurance offered for certain types of buildings, because, if not, it means that ships and cargoes are insured with a premium and houses and warehouses, if they are deemed to be essential, are insured without a premium, and houseowners and shopkeepers are not covered at all?

Mr. Pritt: There is nothing in the words which the hon. Gentleman carefully read out about anything in the nature of lorries or lighters". It is merely buildings.

Mr. Cross: It is essential plant.

Mr. Wilmot: Is there a premium for the warehouses?

Mr. Cross: There is no premium for the warehouses. The whole matter of finding a definition of what is to be an insurable article under Part II is one of very great difficulty. The actual principle which has been adopted in the provisions of Part II relates to those goods which it is essential should be kept moving in circulation for the purpose of maintaining the life of the people and of prosecuting a war. It is inevitable that any single definition like that should not cover everything which it may be necessary promptly to replace. This is the best borderline that can be drawn. There are certain things which come the other side of that borderline, and it is necessary that they should be made the subject of prompt compensation, and the matters to which I have just been referring are such items.

Mr. Shinwell: May I read to the hon. Gentleman not the whole statement, but the relevant statement which was made by the Chancellor of the Exchequer with which, I understand, the right hon. Gentleman the President of the Board of Trade agreed. This is what he said:


 That does not mean in the least that individual properties which suffer" — 
and by "properties" I mean lighters, barges, trucks, lorries, and warehouses—"
ought to be left to bear the loss unaided, but that the compensation should be on the highest scale compatible with the circumstances of the country after and not before the conflict." — [OFFICIAL REPORT, 31st January, 1939 col. 29, Vol. 343.]
Is that quite clear? Is that the decision of the Government? Does it not mean that these forms of property out with the scope of this present Bill will not be compensated until the end of the war?

Mr. Remer: Does it not cover not only the voyage across the Atlantic, or where-ever it may be, but the whole transaction on landing on the quay and for several days after landing?

Mr. Cross: I do not think that it would serve any purpose for me to repeat the statement made by my right hon. Friend this afternoon. He has made it perfectly clear in one or two respects that the Government are not adhering letter for letter and word for word to the statement made by my right hon. Friend the Chancellor of the Exchequer on 31st January last. My right hon. Friend has already pointed out one or two respects in which it has been found desirable to adapt the particular provisions which were at that time foreshadowed.
I think that the main body of criticism which has been levelled this afternoon and most frequently expressed has been that levelled at the point that there is in this Bill no insurance for property or for plant. Clearly from the defence aspect, which is, and must be, our primary concern, it is necessary, first of all, that we should maintain the supply of the things which are essential to the life of the people and to the conduct of war. We already have at any one time a liability for some £380,000,000, as my right hon. Friend has indicated, on ships and on cargoes, and there must be added to this a further and far larger liability amounting to some £2,000,000,000 in respect of commodities.
In regard to these liabilities it is essential that there should be prompt payment if we are to maintain the circulation of goods in this country. The proposal is that we should add buildings to this liability, involving a further sum of £10,000,000,000 or, including plant, £12,000,000,000. It is that enormous and unknown contractual obligation that the

Government are unwilling to accept. The scale of damage which might be incurred is unknown, but we at least know, or we are advised, that it might be very heavy. The Government are unwilling to enter into an unknown commitment, the full extent of which may be perfectly ruinous. A Government insurance scheme in this respect would impose upon the Government the obligation to pay the full amount of damage in respect of insured property, regardless of the amount of the premium which had been received, the condition of the nation's finances at that time, or the country's own vital war needs.
The only premium in the terms of which we can think at all would be a premium level which would bear some relation to the premium charged for the insurance of commodities under Part II of this Bill, and that is a level which is far too high for property. It would undoubtedly be an intolerable burden upon the property owner, and would have other repercussions on rent and in other directions which would be very undesirable. The hon. Member for Seaham (Mr. Shinwell) talked of the fire insurance rate, and said that that rate would not be excessive. It certainly would not be, but it bears no relation whatever to the level of loss which we are advised might be incurred. It would be a mere drop in the ocean. That is a point which it is necessary to make. I thought that remark of the hon. Member revealed the background of his mind and went a long way to explain why he was willing to advocate insurance of this kind. I felt that if he regarded that rate of premium as being what I have just described, a mere drop in the ocean, he would not have brought forward a suggest of that kind.

Mr. Shinwel: l: Does the hon. Member know the reason why? It was because I recognised that no matter what insurance scheme the Government devised, either directly or in association with insurance companies, or underwriters, or indemnity associations, that if the losses were very high during the war, as they might well be, the Government would at some stage, in association with the indemnity associations, have to limit the liability. Therefore, the question of premium is not important. What is important about the premium, and we want it to be comprehensive in character, is


that it should give confidence to the community that, having paid a premium, then within the limits that the Government could devise, recompense would be paid for damage.

Mr. Cross: If the Government issue a policy that policy must bear on the face of it some fixed sum which the Government will be prepared to pay. The hon. Member is now saying that the Government must limit its liability. That means that they are only to insure some percentage of property and not the whole of it.

Colonel Baldwin-Webb: On a point of Order. Is the statement to which we are listening now cancelling the statement, the very helpful statement, made earlier by the President of the Board of Trade in regard to an inquiry into the position?

Mr. Deputy - Speaker (Sir Dennis Herbert): The hon. and gallant Member is now raising a point as to whether it is advisable that the statement made by the President of the Board of Trade should be discussed. That is not a point of Order. It has been discussed and the discussion was and is in order.

Mr. Cross: So far as the intervention of my hon. and gallant Friend is concerned, I must say that, naturally, my right hon. Friend stands by every word that he said to-day, and I am not conscious of having said anything that can be in any degree 'in conflict with it. The only other matter to which I need refer is the question of our readiness to put the various provisions of this Bill into operation. The main ship reinsurance scheme is already in operation and would carry on in time of war. The cargo pool scheme is in

operation, and a war-time office for cargoes could be put into operation at 48 hours' notice in the event of the outbreak of war.

Mr. Alexander: I am sorry that the hon. Member has had such a Box and Cox time of it, but he has not answered the point as to what use it is to insure stocks of flour, when you do not insure the machinery.

Mr. Cross: I think I rather exhaustively dealt with that point when I spoke on compensation for essential plant. If there are not enough bakeries, then, clearly, other bakeries would have to be built. The matter would come under that heading. For that reason I did not make any reference to the right hop. Gentleman's point in that regard.
I have only a few more words to say about the commodity insurance scheme. The registration scheme, as outlined in the Bill, can be put into operation at very short notice. The forms of application have to be finally settled, but we think it should be possible to bring the scheme into operation in the course of the month of August. I think this shows that we have attained already a very high degree of preparedness against the eventuality of war. War risk insurance is, of course, one of the vital needs of this country in time of war, and I think the country may be confident that in that eventuality there is adequate machinery for our protection.

Question put, "That the words proposed to be left out stand part of the' Question."

The House divided: Ayes, 189; Noes,

Division No. 243.]
AYES.
[3.43 p.m.


Acland-Troyte, Lt.-Col. G. J.
Chamberlain, Rt. Hn. N. (Edgb't'n)
Eden, Rt. Hon. A.


Adams, S. V. T. (Leeds, W)
Channon, H.
Elliston, Capt. G. S.


Agnew, Lieut.-Comdr. P. G.
Chapman, A. (Rutherglen)
Emmott, C. E. G. C.


Albery, Sir Irving
Churchill, Rt. Hon. Winston S.
Emrys-Evans, P. V.


Allen, Lt.-Col. Sir W. J. (Armagh)
Clarke, Colonel R. S. (E. Grinstead)
Entwistle, Sir C. F.


Amery, Rt. Hon. L. C. M. S.
Clarry, Sir Reginald
Fleming, E.L.


Anderson, Sir A. Garrett (C. of Ldn.)
Cobb, Captain E. C. (Preston)
Fremantle, Sir F. E.


Anderson, Rt. Hn. Sir J. (Se'h Unliv's)
Colville, Rt. Hon. John
Furness, S. N.


Assheton, H.
Conant, Captain R. J, E.
Fyfe, D. P. M.


Astor, Viscountess (PIymouth, Sutton)
Cooke, J. D. (Hammersmith, S.)
Gower, Sir R. V.


Baillie, Sir A. W. M.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)
Graham, Captain A. C. (Wirral)


Balfour, Capt. H. H. (Isle of Thanet)
Cooper. Rt. Hn. T. M. (E'nburgh, W.)
Granville, E. L.


Barrie, Sir C. C.
Croft, Brig.-Gen. Sir H. Page
Gridley, Sir A. B.


Beauchamp, Sir B. C.
Crookshank, Capt. Rt. Hon. H. F. C.
Grimston, R. V.


Beaumont, Hon. R. E. B. (Portsm'h)
Cross, R. H.
Hambro, A. V.


Beit, Sir A. L.
Crossley, A. C.
Hammersley, S. S.


Bennett, Sir E. N.
Culverwell, C. T.
Hannah, I. C.


Bernays, R. H.
Davidson, Viscountess
Hannon, Sir P. J. H.


Braithwaite, J. Gurney (Holderness)
Davison, Sir W. H.
Harvey, T. E. (Eng. Univ's.)


Brass, Sir W.
De la Bère, R.
Haslam, Henry (Horncastle)


Brooke, H. (Lewisham, W.)
Denman, Hon. R. D.
Haslam, Sir J. (Bolton)


Brown, Rt. Hon. E. (Leith)
Doland, G. F.
Heilgers, Captain F. F. A.


Bullock, Capt. M.
Donner, P. W.
Heneage, Lieut.-Colonel A. P.


Burgin, Rt. Hon. E. L.
Dorman-Smith, Col. Rt. Hon. Sir R. H.
Hepburn, P. G. T. Buchan


Burton, Col. H. W.
Dower, Lieut.-Col. A. V. G.
Hepworth, J.


Campbell, Sir E. T.
Drewe, C.
Hoare, Rt. Hon. Sir S.


Cary, R. A.
Dugdale, Captain T. L.
Hogg, Hon. Q. McG.


Cazalet, Thelma (Islington, E.)
Duggan, H. J.
Hopkinson, A.


Cazalet, Capt. V. A. (Chippenham)
Dunglass, Lord
Horsbrugh, Florence




Howitt, Dr. A. B.
Morrison, G. A. (Scottish Univ's.)
Simon, Rt. Hon. Sir J. A.


Hudson, Capt. A. U. M. (Hack., N.)
Morrison, Rt. Hon. W. S. (Cirencester)
Smiles, Lieut.-Colonel Sir W. D.


Hunloke, H. P.
Muirhead, Lt.-Col. A. J.
Smith, Bracewell (Dulwish)


Hunter, T.
Munro, P.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Hurd, Sir P. A.
Neven-Spence, Major B. H. H.
Stewart, J. Henderson (Fife, E.)


Jarvis, Sir J. J.
Nioolson, Hon. H. G.
Stewart, William J. (Belfast, S.)


Jennings, R.
O'Connor, Sir Terence J.
Strauss, H. G. (Norwich)


Keeling, E. H.
O'Neill, Rt. Hon. Sir Hugh
Strickland, Captain W. F.


Kellett, Major E.O.
Orr-Ewing, I. L.
Stuart, Hon. J. (Moray and Nairn)


Kerr, Sir John Graham (Soo'sh Univs.)
Palmer, G. E. H.
Sueter, Rear-Admiral Sir M. F.


Lambert, Rt. Hon. G.
Patrick, C. M.
Sutcliffe, H.


Lelghton, Major B. E. P.
Peake,O.
Thomas, J. P. L.


Liddall. W. S.
Pickthorn, K. W. M.
Thorneycroft, G. E. P.


Lindsay, K. M.
Pilkington, R.
Thornton-Kemslay, C. N.


Lipson, D. L.
Pownall, Lt.-Col. Sir Assheton
Titehfield, Marquess of


Little, J.
Raikes, H. V. A. M.
Touche, G. C.


Lloyd, G. W.
Ramsay, Captain A. H. M.
Tryon, Major Rt. Hon. G. C.


Looker-Lampson, Comdr.O. S.
Ramsbotham, Rt. Hon. H.
Wallace, Capt. Rt. Hon. Euan


Lucas, Major Sir J. M.
Rathbone, Eleanor (English Univ's.)
Ward, Lieut-Col. Sir A. L. (Hull)


Mabane, W. (Huddersfield)
Rathbone, J. R. (Bodmin)
Ward, Irene M. B. (Wallsend)


M'Connell, Sir J.
Read, A. C. (Exeter)
Wardlaw-Milne, Sir J. S.


McCorquodale, M. S.
Reed, Sir H. S. (Aylesbury)
Warrender, Sir V.


Macdonald, Capt. P. (lsle of Wight)
Reld, J. S. C. (Hillhead)
Waterhouse, Captain C.


Macnamara, Lieut.-Colonel J. R. J.
Ramer, J. R.
Wells, Sir Sydney


Maitland, Sir Adam
Rickards, G. W. (Skipton)
Whiteley, Major J. P. (Buckingham)


Manningham-Bullar, Sir M.
Rosbotham, Sir T.
Wickham, Lt.-Col. E. T. R.


Margesson, Capt. Rt. Hon. H. D. R.
Ross, Major Sir R. D. (Londonderry)
Winterton, Rt. Hon. Earl


Markham, S. F.
Royds, Admiral Sir P. M. R.
Wise, A. R.


Marsden, Commander A.
Russell, Sir Alexander
Womersley, Sir W. J.


Mason, Lt.-Col. Hon. G. K. M.
Russell, S. H. M. (Darwen)
Wood, Hon. C. I. C.


Mellor, Sir J. S. P. (Tamworth)
Salmon, Sir I.
Young, A. S. L. (Partick)


Mitchell, Sir W. Lane (Streatham)
Salter, Sir J. Arthur (Oxford U.)



Moore, Lieut.-Col. Sir T. C. R.
Sanderson, Sir F. B.
TELLERS FOR THE AYES— 


Morgan, R. H. (Worcester, Stourbridge)
Scott, Lord William
Lieut.-Colonel Kerr and


Morris-Jones, Sir Henry
Selley, H. R.
Captain McEwen




NOES.


Acland, Sir R. T. D.
Gibson, R. (Greenock)
Pethick-Lawrence, Rt. Hon. F. W.


Adams, D. (Consett)
Green, W. H. (Deptford)
Pritt, D. N.


Adams, D. M. (Poplar, S.)
Greenwood, Rt. Hon. A.
Ridley, G.


Adamson, Jennie L. (Dartford)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Ritson, J.


Adamson, W. M.
Griffiths, G. A. (Hemsworth)
Rothschild, J. A. de


Alexander, Rt. Hon. A. V. (H'lsbr.)
Griffiths, J. (Llanelly)
Sanders, W. S.


Ammon, C. G.
Groves, T. E.
Seely, Sir H. M.


Anderson, F. (Whitehaven)
Guest, Dr. L. H. (Islington, N.)
Shinwell, E.


Banfield, J. W.
Hall, J. H. (Whitechapel)
Silkin, L.


Barnes, A. J.
Hardie, Agnes
Simpson, F. B.


Barr, J.
Harris, Sir P. A.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Batey, J.
Hayday, A,
Smith, Ban (Rotherhithe)


Beaumont, H. (Batley)
Henderson, A. (Kingswinford)
Smith, E. (Stoke)


Bellenger, F. J.
Henderson, J. (Ardwick)
Smith, Rt. Hon. H. B. Lees (K'ly)


Brown, C. (Mansfield)
Henderson, T. (Tradeston)
Smith, T. (Normanton)


Burke, W. A.
Hopkin, D.
Sorensen, R. W.


Charleton, H. C.
Horabin, T. L.
Stephen, C.


Chater, D.
Jenkins, A. (Pontypool)
Stewart, W. J. (H'ght'n-le-Sp'ng)


CIuse, W. S.
John, W.
Strauss, G. R. (Lambeth, N.)


Cooks, F. S.
Jones, A. C. (Shipley)
Summerskill, Dr. Edith


Collindridge, F.
Kennedy, Rt. Hon. T.
Taylor, R. J. (Morpeth)


Cove, W. G.
Kirby, B. V.
Thorne, W.


Daggar, G.
Lansbury, Rt. Hon. G.
Thurtle, E.


Davies, R, J. (Westhoughton)
Leach, W.
Tinker, J. J.


Day. H.
Logan, D. G.
Viant, S. P.


Dobbie, W.
Macdonald, G. (Ince)
Walker, J.


Edwards, N. (Caerphilly)
McEntee, V. La T.
Wedgwood, Rt. Hon. J. C.


Evans, D.O. (Cardigan)
MacLaren, A.
White, H. Graham


Fletcher, Lt.-Comdr. R. T. H.
Marshall, F.
Williams, E. J. (Ogmore)


Foot, D. M.
Maxton, J.
Williams, T. (Don Valley)


Franker, D.
Messer, F,
Wilmot, John


Gallacher, W.
Montague, F.
Windsor, W. (Hull, C,)


Gardner, B. W.
Morgan, J. (York, W.R., Doncaster)
Woods, G. S. (Finsbury)


Garro Jones, G. M.
Morrison, R. C. (Tottenham, N.)
Young, Sir R. (Newton)


George, Major G. Lloyd (Pembroke)
Noel-Baker, P. J.



George, Megan Lloyd (Anglesey)
Parker, J.
TELLERS FOR THE NOES. —




Mr. Whiteley and Mr. Mathers.




division No. 244.]
AYES.
[8.44 p.m.


Acland-Troyte, Lt.-Col. G. J.
Chapman, A. (Rutherglen)
Eckersley, P. T.


Adams, S. V. T. (Leeds, W.)
Clarry, Sir Reginald
Elliot, Rt. Hon. W. E.


Agnew, Lieut.-Comdr. P. G.
Colfox, Major Sir W. P.
Elliston, Capt. G. S.


Anderson, Sir A. Garrett (C. of Ldn.)
Conant, Captain R. J. E.
Emery, J. F.


Aske, Sir R. W.
Cooper, Rt. Hn. T. M.(E'nburgh,W.) 
Erskine-Hill, A. G.


Baillie, Sir A. W. M.
Courthope, Col. Rt. Hon. Sir G. L.
Evans, D. O.(Cardigan) 


Baldwin-Webb, Col. J.
Craven-Ellis, W.
Findlay, Sir E.


Balfour, G. (Hampsteard)
Croft, Brig.-Gen. Sir H. Page
Fleming, E. L.


Balfour, Capt. H. H. (Isle of Thanet)
Crookshank, Cap, Rt. Hon. H. F. C.
Furness, S. N.


Beamish, Rear-Admiral T. P. H.
Cross, R. H.
Fyfe, D. P. M.


Beauchamp, Sir B, C.
Crowder, J. F. E.
Gibson, Sir C. G. (Pudsey and Otley)


Beechman, N. A.
Culverwell, C. T.
Gower, Sir R. V.


Beit, Sir A. L.
Davidson, Viscountess
Graham, Captain A. C. (Wirral)


Bower, Comdr. R. T.
Davies, C. (Montgomery)
Grant-Ferris, Flight-Lieutenant R.


Braithwaite, J. Gurney (Holderness)
Denman, Hon. R. D.
Granville, E. L.


Brass, Sir W.
Drewe, C.
Gridley, Sir A. B.


Brisooa, Capt. R. G.
Dugdale, Captain T. L.
Griffith, F. Kingsley (M'ddl'sbro, W.)


Bullook, Capt. M.
Duggan, H. J.
Grimston, R. V.


Burgin, Rt. Hen E. L.
Duncan, J. A. L.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)


Cary, R. A.
Dunglass. Lord
Hambro, A. V.




Hammersley, S. S.
Maitland, Sir Adam
Selley, H. R.


Hannah, I. C.
Mander, G. le M.
Shakespeare, G. H.


Hannon, Sir P. J. H.
Margasson, Capt. Rt. Hon. H. D. R.
Shepperson, Sir E. W.


Harris. Sir P. A.
Markham, S. F.
Simon, Rt. Hon. Sir J. A.


Harvey, T. E. (Eng. Univ's.)
Meller, Sir R. J. (Mitcham)
Smiles, Lieut.-Colonel Sir W. D.


Haslam, Henry (Horncastle)
Mellor, Sir J. S. P. (Tamworth)
Smith, Bracewell (Dulwich)


Haalam, Sir J. (Belton)
Mills, Sir F. (Leyton, E.)
Smithers, Sir W.


Heilgers, Captain F. F. A.
Mills, Major J. D. (New Forest)
Snadden, W. McN.


Hepworth, J.
Mitcheson, Sir G. G,
Somervell, Rt. Hon. Sir Donald


Hopkinson. A.
Moore, Lieut.-Col. Sir T. C. R.
Somerville, Sir A. A. (Windsor)


Horabin, T. L.
Morgan, R. H. (Worcester, Stourbridge)
Spens, W. P.


Hudson, Rt. Hon. R. S. (Southport)
Morris, J. P. (Salford, N.)
Stanley, Rt. Hon. Oliver (W'm'l'd)


Hume, Sir G. H.
Munro, P.
Stewart, J. Henderson (Fife, E.)


Hunloke, H. P.
Nall, Sir J.
Strauss, H. G. (Norwich)


Hunter, T.
Neven-Spance, Major B. H. H.
Strickland, Captain W. F.


Hutchinson, G. C.
Nicholson, G. (Farnham)
Stuart, Lord C. Crichton. (N'thw'h)


Inskip, Rt. Hon. Sir T. W. H.
O'Connor, Sir Terence J.
Stuart, Hon. J. (Moray and Nairn)


Jarvis, Sir J. J.
O'Neill, Rt. Hon. Sir Hugh
Tasker, Sir R. I.


Jones, Sir G. W. H. (S'k N'w'gt'n)
Orr-Ewing, I. L.
Thorneycroft, G. E. P.


Jones, Sir H. Haydn (Merioneth)
Owen, Major G.
Thornton-Kemsley, C. N.


Keeling, E. H.
Peaks, O.
Train, Sir J.


Kellett, Major E. O.
Petherick, M.
Tree, A. R. L. F.


Kerr, Colonel C, I. (Montrose)
Pickthorn, K. W. M.
Tryon, Major Rt. Hon. G. C.


Kerr, Sir John Graham (Soo'sh Univs.)
Pilkington, R.
Wakefield, W. W.


Lamb, Sir J. Q.
Pownall, Lt.-Col. Sir Assheton
Wallace, Capt. Rt. Hon. Euan


Lees-Jones, J.
Prooter, Major H. A.
Ward, Lieut.-Col. Sir A. L. (Hull)


Leech, Sir J. W.
Rankin, Sir R.
Ward, Irene M. B. (Wallsend)


Leighton, Major B. E. P.
Rathbone, J. R. (Bodmin)
Warrender, Sir V.


Liddall, W. S.
Reed, A. C. (Exeter)
Waterhouse, Captain C.


Lindsay, K. M.
Reed, Sir H. S. (Aylesbury)
Wayland, Sir W. A


Lipson, D. L.
Reid, J. S. C. (Hillhead)
Wells, Sir Sydney


Little, J.
Remer, J. R.
White, H. Graham


Llewellin, Colonel J. J.
Riokarda, G. W. (Skipton)
Whiteley, Major J. P. (Buokingham)


Lloyd, G. W.
Roberts, W. (Cumberland, N.)
Wickham, Lt.-Col. E. T. R.


Locker-Lampson, Comdr. O. S.
Ropner, Colonel L.
Williams, Sir H. G. (Croydon, S.)


Loftus, P. C.
Rosbotham, Sir T.
Wilson, Lt.-Col. Sir A. T, (Hitohin)


Lucas, Major Sir J. M.
Rowlands, G.
Windsor-Clive, Lieut.-Colonel G.


Mabane, W, (Huddersfield)
Royds, Admiral Sir P. M. R.
Winterton, Rt. Hon. Earl


MacAndraw, Colonel Sir C. G.
Russell, Sir Alexander
Womersley, Sir W. J.


M'Connell, Sir J.
Salmon, Sir I.
Wood, Hon. C. I. C.


MacDonald, Sir Murdoch (Inverness)
Samuel, M. R. A.
young, A. S. L. (Partick)


Macdonald. Capt. P. (Isle of Wight)
Sandeman, Sir N. S.



MoEwen, Capt. J. H. F.
Sanderson, Sir F. B.
TELLERS FOR THE AYES.


Maonamara, Lieut.-Colonel J. R. J.
Schuster, Sir G. E.
Major Sir James Edmondson




and Mr. Buchan-Hepburn.




NOES.


 Acland, sir R.T.D.
Garro Jones, G. M.
Poole, C. C.


Adams, D. (Consett)
George, Megan Lloyd (Anglesey)
Pritt, D. N.


Adams, D.M. (poplar, S.)
Gibson, R. (Greenock)
Quibell, D. J. K.


Adamson, W.M.
Greenwood, Rt. Hon. A.
Richards, R. (Wrexham)


Alexander, Rt. Hon. A. V. (H'lsbr.)
Griffiths, G. A. (Hemsworth)
Ridley, G.


Ammon, C G.
Griffiths, J. (Llanelly)
Riley, B.


Anderson, F. (Whitehaven)
Groves, T. E.
Ritson, J.


Banfield, J. W.
Hayday, A.
Robinson, W. A. (St. Helens)


Barnes, A. J.
Henderson, A. (Kingswinford)
Shinwell, E.


Barr, J.
Henderson, T. (Tradeston)
Simpson, F. B.


Bartlett, C. V. O.
Isaacs, G. A.
Sloan, A.


Batey, J.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Beaumont, H. (Batley)
John, W.
Smith, E. (Stoke)


Bellenger, F. J.
Johnston, Rt. Hon. T.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Bevan, A.
Kennedy, Rt. Hon. T.
Smith, T. (Normanton)


Brown, C. (Mansfield)
Kirby, B. V.
Sorensen, R. W.


Cape, T.
Kirkwood, D.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Charleton, H. C.
Lansbury, Rt. Hon. G.
Summerskill, Dr. Edith


Chater, D.
Lathan, G.
Taylor, R. J.(Morpeth)


Cluse, W. S.
Lawson, J. J.
Thorns, W.


Cooks, F. S.
Leach, W.
Thurtle, E.


ColIindridge, F.
Logan, D. G.
Tinker, J. J.


Cove, W G
Macdonald, G. (Incs)
Viant, S. P.


Cripps, Hon. Sir Stafford
Lunn, W.
Tomlinson, G.


Daggar, G.
McEntee, V. La T.
Walkden, A. G.


Dalton, H.
McGhee, H. G.
Watking, F. C.


Davies, R. J. (Westhoughton)
MacLaren, A.
Watson, W. McL.


Davies, S. O. (Merthyr)
Maclean, N.
Welsh, J. C.


Dobbie, W.
Marshall, F.
Williams, E. J (Ogmore)


Dunn, E. (Rother Valley)
Messer, F.
Williams, T. (Don Valley)


Ede, J. C.
Montague, F.
Wilmot, John


Edwards, Sir C. (Bedwellty)
Morrison, Rt. Hon. H. (Hackney, S.)
Woods, G. S. (Finsbury)


Edwards, N. (Caerphilly)
Naylor, T. E.
Young, Sir R. (Newton)


Fletcher, Lt.-Comdr. R. T. H.
 paling, W.



Frankel, D.
Parker, J.
TELLERS FOR THE NOES 


 Gardener, B. W. 
Pethick-Lawrence, Rt. Hon. F. W.
Mr. Mathers and Mr. Whiteley.


Question put, and agreed to.

Bill committed to a Committee of the Whole House for To-morrow. — [Captain argesson.]

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[SIR DENNIS HERBERT in the chair.]

Orders of the Day — WAR RISKS INSURANCE.

Motion made, and Question proposed,
 That, for the purposes of any Act of the present Session to make provision for authorising the Board of Trade, in the event of war and in other circumstances, to undertake the insurance of ships and other goods, for the payment by the Board of Trade, in time of war, of compensation in respect of goods lost or damaged in transit, for requiring persons to insure goods against certain risks in time of war, and for purposes connected with the matters aforesaid, it is expedient to authorise—
(a)the payment into the Exchequer of the amount by which the sum standing at any time to the credit of either of the funds established under the said Act exceeds the sum which, in the opinion of the Board of Trade and the Treasury, is likely to be required for the making of payments out of that fund; and
(b)the issue out of the Consolidated Fund of the amount of any sum so paid into the Exchequer and the application of that amount in redeeming or paying off debt;
and to authorise the Treasury to raise money and to create and issue securities for the purpose of providing for the issue of sums out of ficiency in either of the said funds. — [Mr. Stanley.]

8.54 p.m.

Mr. Shinwell: I am sorry to be persistent, but I propose to take advantage of the Financial Resolution to put a point for the purposes of elucidation. In the latter stages of the previous Bill there appeared to be some confusion arising from the liabilities to be undertaken by the Government. Reference has been made to a statement made by the Chancellor of the Exchequer on 31st January this year, and to the statement made by the President of the Board of Trade in the course of the Debate this afternoon. There appears to be a discrepancy between those two utterances, and it is on that point that I desire some elucidation.

The Chairman: I am not quite sure whether the hon. Member is in order on this Resolution. This is a Ways and

Means Resolution not the Financial Resolution; that comes next, but if the point of the hon. Member is not a long one, I think we can dispose of it now that the hon. Member has started it.

Mr. Shinwell: It is as well to deal with it now as at any other time, and as it is a point which relates to the matter before us, I think it can be dealt with effectively —at any rate, it can be dealt with, whether effectively, I am not sure, for that depends upon what the right hon. Gentleman has to say. The point which emerged in the course of the Debate on the Bill was whether, in the case of certain classes of property which are regarded as being outside the scope of the Bill, but which it is the intention of the Government to deal with at some stage, the Government propose to follow the statement made by the Chancellor of the Exchequer in January last, and to meet claims at the end of the war, or whether they propose to do as the right hon. Gentleman appeared to indicate in his speech this afternoon—although that point is not quite clear—and to compensate after the damage has been sustained, in accordance with the circumstances, without waiting for a final assessment at the end of the war. I hope I have made the point clear. It is important from the point of view of the public that everybody should be informed as to his position in the event of damage to property occurring during war time. It is clear, as was made apparent during the proceedings on the Bill, that certain forms of property are to be covered by insurance, and in the event of damage, claims are to be fully met, and as it appears, they are to be met almost immediately. As regards other forms of property, it is not clear whether we are to rely upon the statement made by the Chancellor in January or the statement made by the right hon. Gentleman this afternoon. For the purpose of elucidation and for the purpose of removing apprehensions which I feel sure must exist in the minds of hon. Members and of people outside, I hope the right hon. Gentleman will clear up that point.

8.57 p.m.

Mr. Stanley: I am obliged to the hon. Member for raising this matter, in a very courteous way, and thus giving me another opportunity of trying to make it plain. I do not think there is any dif-


ferentiation between the statement I made this afternoon and what was said by my right hon. Friend the Chancellor of the Exchequer on 31st January. I am not sure whether the hon. Member has read the whole of the statement that was then made by the Chancellor of the Exchequer. My right hon. Friend dealt at very considerable length with the question with which I dealt to-day, namely, the possibility of a complete form of insurance of house property. He stated the difficulties with regard to that, and went on to make a statement concerning compensation at the end of the war. up to the limit of the financial ability of the State in those circumstances, a statement to which reference has been made several times during the Debate to-day. Therefore, it is quite clear that the main provision as advocated by the Government —leaving aside, of course, any question of what the committee which we are going to set up may be able to suggest with regard to any mutual form of indemnity—is that at the end of the war the people will be compensated in full, if possible, and if not, up to the financial ability of the State at the time. That part is quite clear. If the hon. Gentleman will read further on in the Chancellor's statement, he will see the following sentences:
I have dealt so far with private property in general, but I must now mention certain particular categories of property. The necessary deferment of compensation until the end of the emergency would, in the absence of special steps, result in the holding up of necessary repairs to essential property which has been damaged. Accordingly a plan has been worked out for the emergency reconstruction of essential property including, where necessary, housing accommodation." — [OFFICIAL REPORT, 31st January, 1939; col. 29, Vol. 343.]
I do not think there is any inconsistency between the two statements. We say that as a general rule we will compensate for damage at the end of the war, but in cases of essential property, where the property has got to be restored at once, we make a special arrangement either for the reconstruction or repair of that particular property, whether it be house property or other forms of fixed property. I think the hon. Member will agree that there is no inconsistency between the statement that was made by the Chancellor and the statement I made this afternoon.

Mr. Shinwell: I think that the right hon. Gentleman's remarks to a very large extent clear away the trouble, apart, of

course, from the main issue as to whether there should be a comprehensive insurance scheme, but I wonder whether the right hon. Gentleman on behalf of the Government, will, not necessarily now, but at some future stage, give some indication as to the kind of plan that has been worked out. I should like to ask whether hon. Members may be acquainted with the terms of the plan, and also whether something in the nature of a schedule of properties included in this particular category could be drawn up. I know that it would be difficult to have a schedule —

Mr. Stanley: The hon. Gentleman will realise that I could not do that, because it is not a question of the type of property. It may depend upon the actual location of a particular property. For instance, reference has been made to a bakery. Whether or not the bakery was restored as being an essential thing might depend upon what other facilities of that sort existed in the neighbourhood. Therefore, it would be impossible to give a schedule of types of property.

Mr. Shinwell: I safeguarded myself to some extent by saying that it might, be difficult to prepare a schedule, but at a later stage it might be possible for the right hon. Gentleman to give hon. Members some indication of what the plan is. If that could be done, I think it would be very useful.

9.2 p.m.

Mr. Barnes: The President of the Board of Trade, in clearing up the difficulty regarding the conflict of statements, has raised rather a grave issue of discrimination. In the case of any type of property which the Government consider to be essential, there is to be immediate compensation. The vast amount of property which might be considered to be immediately essential is to be left to problematical compensation at the end of the war. With regard to the Treasury Committee that will examine the whole problem, am I to take it that those will be their terms of reference, and that any possibility of a comprehensive insurance scheme to meet this form of liability will be ruled out, or will that committee have full powers and an opportunity to examine the cover of all property?

Mr. Stanley: I made a very careful statement as to what the committee


would inquire into, and the position that the Government took up. The hon. Gentleman will be able to read that state-men in the Official Report to-morrow; it represents the position of the Government, and I have nothing either to add to or subtract from it.

9.3 p.m.

Mr. Bellenger: There is one question I should like to ask—

The Chairman: I think the discussion is now getting very near the limit of what we may discuss on this Resolution.

Mr. Stanley: Further to that point, Sir Dennis. In view of the fact that we have now started on this Resolution and that it might be more convenient to clear up these matters now, would it not be possible for you to take a lenient view of the matter?

The Chairman: The right hon. Gentleman rather anticipated what he thought I was going to say. I was about to say that so far the discussion has been all right, but when it comes to a discussion of the details relating to this other matter of insurance of buildings and other property which is not dealt with under the Bill or the Resolution, then it is quite another matter. The right hon. Gentleman has shown that certain buildings and properties which it was thought would not be covered are so covered as to be the subject of compensation immediately. Those are things which come within what is to be dealt with under this Bill. When it comes to matters which are definitely outside the Bill, but to which some reference is inevitable. I wish to give a warning to hon. Members that we cannot on this occasion discuss the details of any such scheme for paying compensation after a war. That is the limitation which I desired to make clear.

Mr. Benjamin Smith: Is not the point at issue one between the scheme adumbrated earlier by the Minister, and the scheme suggested which would include all property? One is limited in its terms while the other is more widely extended. The right hon. Gentleman, if I recollect aright, spoke of some mutual insurance scheme, whereas the scheme suggested from this side was of a more comprehensive nature. Is it not open to us to discuss the distinction between the two?

The Chairman: The hon. Member is referring to the very thing which, I have said, is beyond the scope of this Resolution. It was against discussing details of that sort that I wished to warn the Committee.

Mr. Bellenger: I merely wish to ask a question arising out of the statement just made by the right hon. Gentleman. Will the compensation which it is proposed to pay for what the Government term essential property, be on the basis of an insurance scheme or will it be paid out of Government funds?

Mr. Stanley: The hon. Gentleman will realise that just now I was reading part of the statement made by my right hon. Friend the Chancellor of the Exchequer. I did not speak necessarily of compensation. Steps taken to repair property might well take the form of giving some terms or other—it might be payments to be set against eventual compensation, or it might be the actual repair of the property itself. There is no question of compensation.

Mr, Bellenger: Will that not be compensation, whether the Government provide it in the form of the actual physical work of repairing the building or by allotting a certain sum of money for that purpose? Whichever it is, will it be on an insurance basis or will it be paid for out of national funds without any insurance premium?

Mr. Stanley: In those circumstances it would be possible in an individual case for the Government to do it on ad hoc terms, subject, of course, to the condition that at the end of the war the man would be liable to be compensated on the same basis as that which was found possible in the case of anybody else. In a particular case of restoring essential properly the Government could make what plans were necessary.

Resolution to be reported To-morrow.

Committee to sit again To-morrow.

Orders of the Day — WAR RISKS INSURANCE [MONEY].

Considered in Committee under Standing Order No. 69.

[SIR DENNIS HERBERT in the Chair.]

Resolved,
 That, for the purposes of any Act of the present Session to make provision for-


authorising the Board of Trade, in the event of war and in other circumstances, to undertake the insurance of ships and other goods, for the payment by the Board of Trade, in time of war, of compensation in respect of good lost or damaged in transit, for requiring persons to insure goods against certain risks in time of war, and for purposes connected with the matters aforesaid, it is expedient to authorise—

the payment out of moneys provided by Parliament, or the issue out of the Con solidated Fund, of the amount by which, at any time when a payment falls to be made out of either of the funds established under the said Act, the sum standing to the credit of that fund is less than the sum required for the making of that payment; and
the payment, out of moneys provided by Parliament, of the expenses incurred for the purposes of the said Act by the Board of Trade, except in so far as they are required to be defrayed out of either of the said funds." (King's Recomendation signified.)—[Mr. Stanley.]

Resolution to be reported To-morrow.

Orders of the Day — NAVY, ARMY AND AIR EXPENDITURE, 1937.

Considered in Committee.

[Sir Dennis Herbert in the Chair.]
1. Whereas it appears by the Navy Appropriation Account for the year ended the 31st day of March, 1938, that the aggregate expenditure on Navy Services has not exceeded the aggregate sums appropriated for those Services, and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Navy Services over the net Expenditure is £172,703 2s. 11d., namely:

£
s.
 d.


 Total Surpluses 
3,177,731
1
2


 Total Deficits 
3,005,027 
18
 3


Net Surplus 
£172,703
2 
11

And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Navy Services as is necessary to make good the said total deficits on other Grants for Navy Services.

SCHEDULE.


No. of Vote.
Navy Services, 1937, Votes.
Deficits.
Surpluses.


Excesses of actual over estimated gross Expenditure.
Deficiencies of actual as compared with estimated Receipts.
Surpluses of estimated over actual gross Expenditure.
Surpluses of actual as compared with estimated Receipts.




£
s.
d.
£
s
d.
£
s.
d.
£
s.
d.


1
Wages, etc., of Officers, Seamen, Boys, and Royal Marines, and Civilians employed on Fleet Services
—
—
145,042
6
0
66,192
8
0


2
Victualling and Clothing
…
78,837
3
9
—
—
46,842
19
10


3
Medical Establishments and Services.
37,585
4
3
—
—
2,139
3
10


4
Fleet Air Arm
—
—
—
—


5
Educational Services 
…
7,550
3
11
—
—
1,119
8
 6


6
Scientific Services
…
—
—
26,814
2
2
22,561
3
7


7
 Royal Naval Reserves
…
—
63
15
0
21,637
14
10
—


8
Shipbuilding, Repairs, Maintenance, etc.:



Sec. 1. Personnel Sec. 
…
11,299
19
9
—
—
27,694
19
5


Sec. 2. Materiel
…
43,573
6
5
—
—
129,236
9
0


 Sec. 3. Contract W
…
—
1,069,311
15
4
1,055,797
13
10
—


9
Naval Armaments
…
—
1,220,418
15
11
1,066,037
0
7
—


10
 Works, Buildings, and Repairs
—
337,878
10
0
403,111
1
10
—


11
Miscellaneous Effective Services
161,050
11
4
—
—
68,693
8
2


12
Admiralty office
…
…
32,447
7
4
103
0
10
—


13
Non-Effective Services (Naval and Marine), Officers.
—
—
36,496
18
1
2,113
6
2


14
Non-Effective Services (Naval and Marine), Men
1,754
16
11
1,292
4
1
—
—


15
Civil Superannuation, Compensation Allowances, and Gratuities.
—
162
7
1
56,200
17
4
—


—
Balances irrecoverable and Claims abandoned.
1,698
16
4
—
—
—




375,797
10
0
2,629,230
8
3
2,811,137
14
8
366,393
6
6



Total Deficits
£3,005,027
18
3
Total Surpluses
£3,177,731
1
2


Net Surplus… £172,703 2 11"

Motion made, and Question proposed, "That the application of such sums be sanctioned."— [Captain Crookshank.]

Mr. Ede: I do not see the representative of the Admiralty in his place. I know that he represents the "silent Service," but even so, he might at least be in a position where he can become vocal if necessary. Are we to have no explanation from the Treasury Bench of this Resolution?

9.13 p.m.

The Parliamentary Secretary to the Admiralty (Mr. Shakespeare): Certainly, if the Committee desires. These are

formal Resolutions which are moved at this time of year, as soon as the Public Accounts Committee has reported, in order to give Parliamentary sanction to the power which the Treasury is authorised to exercise on behalf of Parliament to enable surpluses in one Vote to be used to make good the deficiencies in another. The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) will remember that when he was Financial Secretary to the Treasury, year by year these Resolutions were formally moved. They deal with this power, which is known as virement and are in order to


show that Parliament has complete power over the Treasury. They are formally submitted in respect of all the three Services year by year. So, we maintain the absolute supremacy of Parliament in matters of finance.

Mr. Ede: That possibly explains why the hon. Gentleman was sitting much further along the bench a moment ago, but there are one or two items here, on which I think we are entitled to some explanation.

The Chairman: I am afraid not on this occasion. The items in the Schedule cannot be discussed on this Resolution.

SCHEDULE.


No. of Vote.
Army Services, 1937, Votes.
Deficits.
Surpluses.


Excesses of actual over estimated gross Expenditure.
Deficiencies of actual as compared with estimated Receipts.
Surpluses of estimated over actual gross Expenditure.
Surpluses of actual as compared with estimated Receipts.



£
s.
d.
£
s
d.
£
s.
d.
£
s.
d.


1
Pay, etc., of the Army
…
—
—
782,474
18
9
583,533
14 1
1


2
Territorial Army and Reserve Forces.
173,555
2
4
3,364
5
1
—
—


3
Medical Services
…
…
28,537
15
7
—
—
8,265
17 
7


4
Educational Establishments.
—
—
12,421
0
0
8,301
15
7


5
Quartering and Movements Supplies, Road Transport,
110,984
1
9
—
—
4,274
4
 9


6
Supplies, Road Transport, and Remounts
280,228
4
10
—
—
76,659
1
3


7
Clothing
…
…
…
45,006
18
1
18,865
3
4
—
—


8
General Stores
…
…
157,678
7
2
—
—
137,615
1
 8


9
Warlike Stores
…
…
—
7,879,846
18
10
7.324,133
19
3
—


10
Works, Buildings, and Lands.
—
966,693
11
2
1,097,135
19
9
—


11
Miscellaneous Effective Services.
—
95,784
14
3
217,732
0
4
—


12
War Office
…
…
33,238
8
1
—
—
125
10
9


13
Half-Pay, Retired Pay, and other Non-effective Charges for Officers.
—
25,675
10
5
16,166
19
6
—


14
Pensions and other Non-effective Charges for Warrant Officers, Non commissioned Officers,
57,425
17
0
—
—
15,510 
17
 10


15
Civil Superannuation.Compensation, and Gratuities
16,067
1
10
—
—
221
9
 5


—
Balances irrecoverable and Claims abandoned.
6,041
0
9
—
—
—




908,762
17
5
8,990,230
3
1 
9,450,064
17
7
833,507
12
11


Total Deficits 
£9,898,993
0
6
Total Surpluses
£10,283,572
10
6


Net Surplus … 384,579 10 0"

" II. Whereas it appears by the Army Appropriation Account for the year ended the 31st day of March, 1938, that the aggregate Expenditure on Army Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule here to appended, the net surplus of the Exchequer Grants for Army Services over the net Expenditure is 384,579 10s., namely:

£
s.
d.


Total Surpluses 
10,283,572
10
6


Total Deficits
9,898,993
0
6


Net Surplus
£384,579
10
0

And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Army Services as is necessary to make good the said total deficits on other Grants for Army Services.

Resolved, "That the application of such sums be sanctioned." — [Captain Crookshank.]
III. Whereas it appears by the Air Appropriation Account for the year ended the 31st day of March, 1938, that the aggregate Expenditure on Air Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Air Services over the net Expenditure is £700,839 14s. 2d., namely:

Schedule.


No. of Vote.
Air Services, 1937, Votes.
Deficits.
Surpluses.


Excesses of actual over estimated gross Expenditure.
Deficiencies of actual as compared with estimated Receipts.
Surpluses of estimated over actual gross Expenditure.
Surpluses of actual as compared with estimated Receipts.



£
s.
d.
£
s
d.
£
s.
d.
£
s.
d.


1
Pay, etc., of the Royal Air Force
—
—
147,684
0
3
1,808
0
1


2
 Quartering, Stores (except Technical), Supplies, and Transportation.
32,996
9
11
—
—
19,722
13
3


3
Technical and Warlike Stores (including Experimental and Research Services).
—
—
71,915
14
7
36,379
18 
0


4
Works, Buildings, and Lands.
—
14,501
12
5
171,898
1
2
—


5
Medical Services
…
20,632
8
6
—
—
2,340
4
 6


6
Technical Training and Educational Services.
485
14
1
1,829
1
4
—
—


7
 Auxiliary and Reserve Forces
—
10
7
6
70,109
3
5
—


8
Civil Aviation
…
…
—
8,974
1
5
240,827
15
1
—


9
Meteorological and Miscellaneous Effective Services.
—
—
3,380
13
11
9,511
18
2


10
Air Ministry 
…
…
24,117
10
0
—
—
752
11
4


11
Half-Pay, Pensions, and other Non-effective Services.
—
—
24,477
16
8
4,259
19
6


—
Balances irrecoverable and Claims abandoned.
3,681
10
7
—
—
—




81,913
13
1
25,315
2
8
733,293
5
1
74,775
4
10



Total Deficits 
£107,228
15
9
Total Surpluses
£808,068
9
11


Net Surplus … £700,839 14 2"

Resolved, "That the application of such sums be sanctioned." — [Captain Crookshank.]

Resolutions to be reported To-morrow.

Orders of the Day — OVERSEAS TRADE GUARANTEES [Money].

Resolution reported:
 That for the purposes of any Act of the present Session to extend the powers of the Board of Trade to give guarantees for the

£
s.
d.


Total Surpluses 
808,068
9
11


Total Deficits
107,223
15
9


Net Surplus
£700,839
14
2

And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Air Services as is necessary to make good the said total deficits on other Grants for Air Services.

purpose of establishing or encouraging overseas trade; to enable the Board to acquire and dispose of securities guaranteed by them under the said Act or under the Export Guarantees Act, 1939, and for purposes connected with the matters aforesaid, it is expedient—

A. subject to the limits hereinafter mentioned, to authorise the payment out of moneys provided by Parliament of expenses to be incurred by the Board of Trade under the said Act of the present Session in connection with guarantees given there under for the purposes aforesaid, and to provide that any amount required for fulfilling


guarantees so given shall, if not paid out of moneys so provided, be charged on and issued out of the Consolidated Fund.

The limits above referred to are that the aggregate amount of the liability at any time of the Board of Trade in respect of guarantees given under the said Act or under Section four of the Export Guarantees Act, 1939, exclusive of any liability in respect of interest on principal moneys so guaranteed shall not exceed sixty million pounds, and, in so far as those guarantees are given in connection with any matter other than the export or an agreement for the export of home-produced goods (including such guarantees as may be treated by virtue of the said Act as such guarantees as aforesaid), shall not exceed six million pounds.

B. to authorise the Treasury to issue from time to time to the Board of Trade out of the Consolidated Fund such sums as may be required to enable the Board to acquire securities (as defined for the purposes of the said Act) guaranteed by them in the exercise of their powers either under the said Act, or under the Export Guarantees Act, 1939;

C. to authorise the Treasury for the purpose of providing money for making issues under the last preceding paragraph, or for replacing sums so issued, to raise money in any manner in which they are authorised to raise money under and for the purposes of Sub-section (1) of Section one of the War Loan Act, 1919; and

D. to make provision for certain consequential or incidental matters including, in particular, authority to the Board of Trade to pay into the Exchequer such sums as they may be directed by the said Act so to pay, and authority for the issue out of the Exchequer of sums so received into it and their application to the redemption or repayment of debt or, so far as they represent interest, in payment of interest other wise payable out of the permanent annual charge for the National Debt."

Orders of the Day — OVERSEAS TRADE GUARANTEES BILL.

Considered in Committee.

[Sir Dennis Herbert in the Chair.]

Clause 1 ordered to stand part of the Bill.

Clause 2. — (Returns as to guarantees.)

9.18 p.m.

Mr. R. S. Hudson (Secretary, Overseas Trade Department): I beg to move, in page3, line 15, to leave out from "given" to the end of line 18.
The object of the Amendment is to omit from Clause 2 the words which re-

quire the Board of Trade, when furnishing the six-monthly report covering the guarantees which have been issued, to include therein details of the classes of goods for which guarantees have been given. The Clause as it stands on the Paper reproduces Section 5 of the Act passed in February of this year, and, as I explained on Friday, when that Act was passed the total sum that we had in mind was £10,000,000 for very limited objects. Since then it has been decided to increase the figure to £60,000,000, and as the Committee is aware, the countries in relation to which the guarantees are to be given have been widely extended. Each of these six-monthly returns will include, not the total figures of the credits which we have in mind in respect of any particular country, but the amounts of the actual guarantees that have been issued by the Board of Trade in the course of the previous six months. Therefore, the figure might well be quite small. It has been always our desire, if possible, to prevent the details of any individual transaction from being disclosed, and I think the Committee will realise that if, for example, the total guarantees given to any particular country in the six-monthly period were in the order of £100,000, and that £100,000 had to be divided up among armaments, consumption goods, machinery, and so on, some of the items would be so small that it would be possible to trace the individual transaction. For reasons which I think the Committee will apprehend, but which I need not more closely particularise, it might well, under present circumstances, be undesirable that the actual amount of the guarantee in respect of any individual item should be known for a particular country. Therefore, we hope the Committee will agree to the deletion of these words. We propose, if they are deleted, to publish in any case the total for each individual country of the guarantees given during the previous six months. The hon. Member for Bassetlaw (Mr. Bellenger) asked me during the Debate on Friday whether I could tell him when we proposed to issue the first return in respect of the transactions falling under Section 4 of the existing Act. I have made inquiries, and I understand that such a return will fall to be issued at about the end of August.

9.22 p.m.

Mr. Pethick-Lawrence: When I first had information that this Amendment was going to be moved, I confess that I felt that the House of Commons was being asked to forgo some of its rights, but on looking over the matter I am bound to say that the information proposed to be withheld from us does not very much affect the position of the House of Commons. We are still to have, half-yearly, a return showing, as respects each country in relation to which guarantees are given, the aggregate amount of the guarantees so given. All that we are not to have is the details showing to what class of goods the guarantees have been made, and in those circumstances, if the right hon. Gentleman feels that it is important that this should not become public property, I do not feel that we are sacrificing a very great deal in meeting the wishes which he has expressed in the matter for the purpose of not disclosing to the outside world what it seems inappropriate to disclose. I can hardly imagine that the Public Accounts Committee will want this particular information, but I presume that if it were desired by the Committee, it would be supplied to them.

Mr. R. S. Hudson: Most certainly. If the Public Accounts Committee asked for it, they would be given it in full.

Mr. Pethick-Lawrence: Then, so far as I am concerned, I do not feel that I shall oppose this Amendment.

9.25 p.m.

Mr. Bellenger: I raised on Friday the particular issue of China, with which I am mostly concerned. I was anxious to see what help the Government are giving to China, and I have reason to believe it is not as much as China expected, or as this House expected. I am glad to see that the right hon. Gentleman is to give us the information which I have asked for in this House, and which I have been refused because it was not in accordance with the traditions of his Department. I assume that the first account to be published in August will show what sterling amounts in the aggregate have been granted to China. That will cover my point. There was another point, which my right hon. Friend has partly covered by requesting the Government to give information, if requested, to the Public Accounts Committee. It is highly desir-

able that the House should know what is happening to these large sums, and although we do not want to elicit information detrimental to the public interest we do want to protect the interests of the taxpayer. But with the explanation that the right hon. Gentleman has given I am satisfied.

Mr. R. S. Hudson: I do not want the hon. Member to think when he sees the information, that I have in any way deceived him. He will only see in each return the amount of the guarantees that have been issued. If I may take as an example the case of Rumania, she will get a total credit of about £5,500,000. I do not know how the orders are to be placed, but clearly the whole amount will not appear in the first six months. I do not want him to think that because a sum of £x appears in the return in the case of China it necessarily means that this is the total of the guarantees which are to be given in respect of exports to China.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Clause 4. — (Financial provisions)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Pethick-Lawrence: I think the right hon. Gentleman should give us an explanation of this long and important Clause.

9.29 p.m.

Mr. R. S. Hudson: As the Committee will remember, I explained during the Second Reading that up to now the procedure has been for foreign Governments to issue securities which were then guaranteed by the Export Credits Department and immediately placed on the market for sale, and that we were afraid that when securities for the much greater sum now in contemplation came to be endorsed by the Department there might arise difficulties in securing a good price for them, having regard to the particular conditions of the day. Therefore we proposed a new method, by which the Board of Trade should be enabled to purchase these securities and either hold them for maturity or release them for sale as and when they were advised that the market was good. Clause IV provides the


machinery for that. Sub-section (I) empowers the Treasury to issue from the Consolidated Fund sums required for the purchase of any security guaranteed by the Board, and provides that securities issued to raise money under this Subsection shall be deemed to have been created and issued under Sub-section (I) of Section I of the War Loan Act, 1919. Sub-section (2) requires that a fund shall be set up, to be called the Acquisition of Guaranteed Securities Fund. Subsection (3) regulates the procedure to be followed by the Board of Trade in regard to payments into the fund. Sub-section (4) provides for the payments that have to be made out of the fund by the Board, and for any excess of the proceeds of sale over the cost of acquisition, and any interest in excess of interest due to the Treasury, to be paid into the Exchequer. Sub-section (6) requires the Board to prepare an account showing the sums received into and paid out of the fund in each financial year, and such account will be: certified and laid before Parliament by the Comptroller and Auditor-General.

Clauses 5 to 9 ordered to stand part of the Bill.

Bill reported, with an Amendment; as amended, to be considered To-morrow.

Orders of the Day — GAS UNDERTAKINGS ACTS, 1920 TO I934.

Resolved,
That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Sileby Gas Light and Coke Company, Limited, which was presented on the 28th day of June and published, be approved.

Resolved,
 That the draft of a Special Order proposed to be made by the Board: of Trade under the Gas Undertakings Acts, 1920 to 1934 on the application of the Urban District Council of Rhondda, which was presented on the 28th day of June and published, be approved.

Resolved,
That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Mayor, Aldermen and Burgesses of the Borough of Darlington, which was presented on the 23rd day of June and published, be approved.

Resolved,
 That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to !934, on the application of the Ennerdale Rural District Council, which was presented on the 23rd day of June and published, be approved.

Resolved,
 That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Wellington (Salop) Gas Company, which was presented on the 22nd day of June and published, be approved." — [Mr. Cross.]

The remaining Orders were read, and postponed.

Orders of the Day — Adjournment.

Resolved, "That this House do now adjourn." — [Mr. Buchan-Hepburn.]

Adjourned accordingly at Twenty-five Minutes before Ten o'Clock.